Oral Answers to Questions

TREASURY

The Chancellor of the Exchequer was asked—

Public Service Agreements

Peter Bottomley: If he will make a statement on the system of assessing performance against the targets he has set for outputs from his public spending increases.

Paul Boateng: The Government have invited the Comptroller and Auditor General to take responsibility for the validation of systems used in reporting on public service agreement targets. The National Audit Office is conducting a pilot study and full implementation will get under way from April this year.

Peter Bottomley: I hope that the Treasury and the National Audit Office will survey passengers, pupils, parents and the police about what they feel about the targets being set and that the feedback will go to Departments. While people still receive letters from hospitals saying that appointments made more than a year ago have been postponed for a further year and that the hospitals hope to receive the funding that is necessary for them to meet their targets—I have such a letter with me—many will need a lot of convincing that the targets for the Departments' work or for the Treasury's standards are being set properly or met. The past five years have been disappointing.

Paul Boateng: I will, of course, be happy to receive and respond to the letter that the hon. Gentleman mentioned. I know that he takes these issues seriously and that he thinks about them. He will therefore recognise that public service agreement targets represent a major reform in public administration. He will also recognise their importance in focusing Departments on delivery, and that point applies to Departments across the board. He will further recognise the technical challenges in relation to data collection and, yes, the need to ensure that customer satisfaction and opinion are taken into account in measuring outcomes. That is why I know that he will welcome the National Audit Office's involvement. That will produce results that he and I know will assist in making sure that this tool—it is no more than that—becomes effective in promoting delivery.

Alan Howarth: Does my right hon. Friend agree that the question of the hon. Member for Worthing, West (Peter Bottomley) would be academic if we were to enter the euro? Far from there being increases in public expenditure in Britain, we would be required to accept deep cuts in public investment. Does my right hon. Friend accept that, whereas the Chancellor's prudent interpretation of the stability and growth pact would drive a coach and horses through it, the Commission's destructive interpretation would unfortunately drive another coach and horses through the Chancellor's spending plans?

Paul Boateng: My right hon. Friend is stretching the question somewhat, but I am bound to say that the questions of the hon. Member for Worthing, West (Peter Bottomley) are always academic and thoughtful. This one was no exception.

Michael Howard: Can the Chief Secretary confirm that the Chancellor has been invited to attend and give evidence to the Public Administration Committee on the question of targets? Will that invitation be accepted?

Paul Boateng: The Chancellor—or rather the Treasury—has indeed been invited to give evidence. As the Minister responsible for PSA targets, I look forward very much to doing that.

Michael Howard: I am delighted to hear that the Chief Secretary is going. Will he confirm that, at the Treasury's request, we provided it as long ago as 25 November with a 300-page dossier that shows that the Government have failed or are failing on 40 per cent. of the targets that they set in 1998 and on 75 per cent. of those set in 2000? The Treasury has repeatedly been asked to provide the calculations on which its ludicrous claims are based. Will he now provide the justification?

Paul Boateng: We have provided the calculations. The true figures are 87 per cent. and 93 per cent. I look forward to studying the evidence that the right hon. and learned Gentleman would seek to produce to substantiate his figures, which, on the face of it, appear to be absolute nonsense.

Michael Howard: The Chief Secretary has had that evidence since 25 November; it is in our document. Despite repeated requests, he has failed to provide any supporting evidence for the figures that he has just given. Is it not the truth that the target regime is a shambles? Did not the Secretary of State for International Development tell the Select Committee there has been a proliferation of targets and that they are seen as what she described as control freakery? The Chief Secretary's Customs and Excise department described one of its targets as a crude selective measure, and five major Departments, including the Department of Health and the Home Office, have still not published the reports that were promised last autumn. Does this total shambles not tell us more about the Government's failure to deliver on the public services than any of the right hon. Gentleman's weasel words? Is it any wonder that the Chancellor did not have the guts to answer this question himself?

Paul Boateng: The right hon. and learned Gentleman is going on a bit, but I think that he has missed the point. Is he really suggesting that any management system, business or enterprise worth its name should not use targets? Even he will know from his experience at the Bar that the most rarefied of chambers—I have no doubt that he was a member of a rarefied set of chambers—has targets. It has targets for responding to the telephone and for fee levels. Is he suggesting that we should not have targets because, frankly, that would be absurd?

Dennis Skinner: Is my right hon. Friend aware that the question asked by my right hon. Friend the Member for Newport, East (Alan Howarth) is indicative of the fact that Labour Against the Euro is a broad church? Surely the setting up of the Franco-German axis in the past few days strengthens the arm of all of us who are against the euro and encourages the Chancellor to keep weaving and dodging.

Paul Boateng: As someone who worships and preaches in a broad church—but not that broad church—I must say that my hon. Friend stretches the point, although he is entitled to do so. He might reflect on the issue of targets, however, and in particular whether the 20 per cent. across-the-board cut on spending proposed by the Conservatives would enable us to deliver on our commitment to improving public services, health, education, transport and infrastructure. The cut would be a disaster and I am sure that the whole House—or at least its Labour Members—will join me in condemning that approach.

Matthew Taylor: Can the Chief Secretary tell us how many of the targets that the Treasury claims have been met have been only partially met—or what is commonly known to the layman as not met?

Paul Boateng: I have a little list, which I am happy to share with the hon. Gentleman in detail. Some 87 per cent. were met or partly met—[Hon. Members: "Ah!"] Hold on a minute. Is the hon. Gentleman seriously suggesting that it is not worth setting a target that requires 75 per cent. of 11-year-olds to meet numeracy standards when the Department for Education and Skills has ensured that 73 per cent. of those pupils perform to that standard, which is up from 62 per cent. when the Conservatives had stewardship of the nation's affairs? I think that that is a target worth striving for.

Debt Relief

Julia Drown: What action he is taking to discourage UK companies from pursuing litigation against heavily indebted poor countries.

Mark Lazarowicz: What his assessment is of the International Monetary Fund's latest proposal for a sovereign debt restructuring mechanism.

Gordon Brown: To avoid individual creditors blocking the restructuring of poor countries' debt, we are proposing the adoption of collective action clauses on a worldwide basis and we are supporting at the IMF meetings in April the proposed new sovereign debt restructuring mechanism. I can also tell the House that, in the case of vulture funds, we are calling on the World Bank to announce expert support to highly indebted poor countries dealing with debt. I can also announce that the UK Government will provide legal help to poor indebted countries facing those problems.

Julia Drown: I welcome the Chancellor's response. When companies such as Iceland sue Guyana for £12 million, does not that undermine the Government's commitment to debt relief? If Guyana gives in, that will create a further problem because it will be breaking the UK's agreement, through the Paris club, that one creditor should not be given preferential treatment. However, given the huge support for debt relief in this country, surely the big issue is that the customers and shareholders of Iceland probably do not want it to sue in the first place.

Gordon Brown: Because the system of debt restructuring is voluntary, and until we get the collective action clauses and the debt restructuring mechanism in place, moral suasion will remain important. We have to look at individual cases to see what can be done. The Nestlé case in Ethiopia was well publicised. There have also been cases in Sierra Leone, Uganda, which involved Yugoslavian vulture funds, and Nicaragua.
	The Guyana case arises from 1976 and involves a company called Booker plc. It concerns the ownership of a plant and Booker is asking for compensation from the Government. The issue will go to collective arbitration. In other words, the international court for settlement of such issues will rule whether the debt is valid. Even if it were ruled to be valid, I would hope that, in the interests of resolving the problem, the company would make the resolution of it part of the general debt forgiveness that is being given to Guyana. I hope that it can be solved on that basis.

Mark Lazarowicz: Can my right hon. Friend give some indication of the time scale for the establishment of the new debt restructuring mechanism? Will he assure the House that he will take a lead in international negotiations to establish such a mechanism, and ensure that it is established somewhat more quickly than the many years that the IMF said that it would take?

Gordon Brown: My hon. Friend raises an important point. If we are to have a sensible system of crisis prevention and crisis resolution—after all, nearly 100 financial crises have led to the need for debt restructuring in the past decade or so—we must get a new mechanism in place. Collective action clauses exist in Britain, and we propose them for the rest of the world.
	The sovereign debt restructuring mechanism proposed by the IMF board would produce an internationally validated and respectable system to which each country could sign up. That would require a change in the IMF articles of association, which is why some have proposed that, in the meantime, there should also be a voluntary code that banks and bondholders could follow as well.
	The important thing is that we see progress, with all countries supporting the need for such a mechanism at April's IMF meeting, and that transitional measures that deal with my hon. Friend's point that there is a need for action on this matter now are put in place. It is in all our interests to avoid the kind of financial crises that have led to poverty as well as economic dislocation in some countries. The proposals from Britain will make a huge difference.

Laurence Robertson: The Chancellor mentioned Ethiopia. I had the pleasure of leading a parliamentary delegation to Ethiopia in December, and we saw at first hand the absolute desperation of people there, who are already becoming hungry. Is it not iniquitous for Nestlé to claim up to $6 million from that country? Is it not claiming that sum at rather a sensitive time, especially given that the claim arises from a business deal that it did when Ethiopia was under a Marxist Government? Should it not have taken rather more care then? Does the Chancellor agree that the Treasury should join the Secretary of State for International Development, who has been very generous towards Ethiopia recently, in trying to persuade Nestlé to drop the claim completely?

Gordon Brown: I am grateful to the hon. Gentleman. I hope that there is all-party support for resolving the issue. There are 60 million people in Ethiopia. The average income is about $100 a year, which is about $2 a week. There are 40 million people facing starvation. It would seem strange at this point to demand extra repayments from a country that is attempting to reform, having got rid of the Government who incurred the debt with Nestlé in the first place. Nestlé has now said that, although it is important that the money is paid, it will give all that is received to famine relief in Ethiopia.
	I think that the hon. Gentleman would agree, however, that we need a system that avoids such problems recurring—or at least if they do occur, one that offers a quick way of dealing with them. That is why we propose the collective action clauses and the new sovereign debt restructuring mechanism for future debts. That is also why we are helping Ethiopia at the moment. I shall meet the President of Ethiopia—as will the Prime Minister—when he is in Britain in the next few weeks so that we can offer help with legal advice and by other means to resolve some of the problems. In addition, as the hon. Gentleman knows, much of the Secretary of State for International Development's aid budget has been diverted to help tackle the famine in Africa.

Adam Price: Is the Chancellor aware of reports that point to the IMF's role in turning a food shortage in Malawi into a severe famine? Indeed, the IMF was implicated in the Malawi Government's disastrous decision to sell their food reserves. In the light of that fact, and given that debt repayment last year constituted 20 per cent. of Malawi's budget, would it not be right to write off its debt?

Gordon Brown: The important thing is first to implement the poverty strategy mechanism—in other words, to ensure that IMF and World Bank policies do not run counter to each other, and that we can take the steps necessary, where decisions are being made, to match economic restructuring with social justice programmes. I think that the hon. Gentleman would agree with that.
	Only 50 per cent. of the aid necessary has so far been pledged for the famine. Even though countries have given some money, it is simply not enough. I hope that, on an all-party basis, we can support other countries in joining us in giving the money necessary to avoid the famine that is hitting not just Ethiopia but all the countries surrounding Malawi.

International Monetary Fund

Kali Mountford: What proposals he will make to the International Monetary Fund at its next meeting to change its regulations.

John McFall: What progress he has made on the international financing initiative.

Gordon Brown: While there is insufficient support in the international community for new IMF regulations that would increase special drawing rights to release new funds for international development, there is now interest from the IMF, the World Bank, the United Nations and IMF member countries in the United Kingdom's recommendation of a new international finance facility. Today, therefore, the Secretary of State for International Development and I are publishing our detailed proposals for that facility, which would release $50 billion a year in additional aid for investment for the poorest countries to tackle problems of health, education and poverty. I hope that we have all-party support for that British initiative.

Kali Mountford: I am delighted with my right hon. Friend's answer. If long-term investment stability and growth are good enough for the British economy, they must surely be right for developing nations. Is it not therefore right to tell the IMF that, instead of always looking to the short term, it must look at long-term relationships in developing nations between donor and recipient states so that they can make proper economic decisions in their own right and have the economic growth that we enjoy?

Gordon Brown: My hon. Friend is right. In return for a commitment from developing countries to pursue policies for stability, growth and the opening up of trade and investment, the international community, particularly the richest countries, should be prepared to say that we will help to meet the millennium development targets: ensuring that poverty is halved by 2015; that every child gets primary education, instead of 120 million being without it; and that infant mortality is cut by two thirds, as is possible with available medical technology. I hope that Britain says unanimously that that is both necessary and urgent.

John McFall: I thank the Chancellor for that initiative. He knows that we have seen a reversal in the fortunes of poor countries over the past few years that has made them even poorer, which is why long-term commitment is essential. What progress has the Chancellor made with his international partners in ensuring that they accept the proposals? We know that aid and debt issues are popular with our constituents, and many thousands of people in our constituencies are signing up on that, so what can we do to ensure progress on that humanitarian objective and achieve our millennium development goals by 2015?

Gordon Brown: I am grateful to my hon. Friend, who has taken an interest in the matter as Chairman of the Treasury Committee. I believe that the International Development Committee will also take an interest in the progress of the initiative. I have talked to almost all the Finance Ministers who will be present at the G7 meetings and European Finance Ministers' meetings about those matters, and I believe that it is possible to gain support. I hope to be able to announce later what initiative we can take at the G7 meeting in February and the IMF meetings in April.
	The fact of the matter is that aid per person in sub-Saharan Africa was $33 a year 20 years ago, but is now only $20 a year, which is simply insufficient, even with all the reforms to meet health and education needs and anti-poverty programmes in those countries. I hope that we can galvanise opinion around the world, but it is also important that the Churches, faith organisations, local groups and non-governmental organisations play a major part, not only in persuading people in Britain of the importance of this but, as they did in the debt campaign, in persuading other countries round the world to support the initiative.

Peter Tapsell: Will the Chancellor look at the IMF regulations on gold in the light of his disastrous decision, against the making of which I repeatedly warned him at the time, to sell most of Britain's gold reserves at the bottom of a long bear market and at $100 a fine ounce below yesterday's close at $360? How much of the taxpayer's money has been lost as a result?

Gordon Brown: The purpose of the sale of gold was to rebalance the holdings of Britain's reserves. It should have been done 20 years ago, so that we had proper balancing and proper risk sharing. I think that the hon. Gentleman will reflect on the question about international development, and agree that he might also wish to support our international finance facility to help the poorest countries.

John Redwood: When discussing international economic stability, will the Chancellor—having presided over a bigger stock market boom and bust here than in many other parts of the world, thanks to his rapacious policies against the corporate sector—take some advice for a change to stave off a boom and bust in the housing market, which could be deeply damaging to many of our constituents?

Gordon Brown: I know that the right hon. Gentleman is trying to tell the shadow Chancellor how to run Opposition policy on the economy, but we will take no lectures from the former Cabinet Minister on boom and bust policies—15 per cent. interest rates under him.

Oona King: When I met the head of the IMF in Rwanda five years ago, he told that me that although IMF policies had been satisfactory, unfortunately all the human capital had been destroyed—very unfortunate. Does my right hon. Friend agree that the IMF has changed beyond description since then, but that it must change further? Could he encourage it to take even greater account of what the IMF terms "human capital"?

Gordon Brown: My hon. Friend is right. I praise the work that she has done in international development and her visit to Rwanda, which was important in alerting this country to some of the problems. We are right to praise the IMF for leading on debt relief over the past few years. There was only one country likely to get debt relief; the number is now 27, and it could be 35. There could be $100 billion of debt relief. With regard to the problems of Rwanda, the way forward is the poverty reduction strategy reports that would enable the country to pursue economic policies with the programme of social reconstruction that are in the best interests of that country. On that basis, I believe that we should be providing far more extensive aid for education, health and the anti-poverty programmes of the country. My hon. Friend is right to highlight the importance of education for the future.

Martin Smyth: The Chancellor's statement is to be welcomed. Does he accept that the IMF must bear some responsibility for letting people know how it is dealing with issues? Many people in our country are confused about what has happened in Malawi. Does the Chancellor agree that the Governments of Malawi and other countries must take some responsibility for their mismanagement of their economies? Having referred to faith communities, does he recognise that hospitals run by faith communities in Malawi are in dire straits partly because the western nations have been recruiting staff here to look after our interests, whereas those staff are needed in countries such as Malawi?

Gordon Brown: I am grateful to the hon. Gentleman for giving his party's support to the international finance facility. I believe that, throughout the United Kingdom, parties may wish to support what we are trying to do. He is right that our proposals are not designed to allow Governments to abdicate their responsibility for what happens in their own country. They are designed to strengthen Governments as they try to make the reforms that are necessary. I think that the hon. Gentleman will agree that when only $20 per head is going in aid to the poorest countries, and only 7.5 per cent. of that is going to education and only 3.5 per cent. to health, those are insufficient resources to enable us to say to those countries that we can reach our side of the bargain with them—that we will help tackle the health, education and social problems. It is a bargain—a deal. The countries must reform to make it possible for aid to be used well. We must increase the amount of money that we are prepared to provide. I am grateful to the hon. Gentleman for his support.

Foreign Direct Investment

Nigel Beard: If he will make a statement on recent trends in foreign direct investment into (a) the United Kingdom and (b) the European Union.

Gordon Brown: Our year-to-year figures are influenced by a number of factors. Britain's stock of foreign direct investment is at 19 per cent. of the total—the highest in Europe and, after the USA, the second highest in the world. A detailed analysis of recent trends in foreign direct investment will be published shortly.

Nigel Beard: Is there any implication in the figures of a preference for the eurozone at the expense of the United Kingdom among foreign direct investors?

Gordon Brown: I know that this is a controversial issue among some people, but we must consider a range of factors that are in play. The main influence of foreign direct investment is mergers and acquisitions. That is 90 per cent. of foreign direct investment. In the recent stock market changes, there has been very little merger and acquisition activity. Equally, the figures are affected by relative exchange rates and by what decisions are being made in the United States, as opposed to decisions being made in Asia and Japan. It is a complicated picture, which is reflected in the fact that there has been a big change in the relative position of manufacturing and financial services over the past few years. The fact of the matter is that foreign direct investment has risen dramatically over the past 10 or 20 years, but trends are at work, including the restructuring of the international economy, that must be looked at. That is why we plan to publish a full paper on this issue in the near future.

Mark Prisk: As the Chancellor said at the beginning of his reply, inward investment is vital for the UK economy, but to compete, we must have an attractive regulatory and tax regime. Given that, and the fact that business taxes here are already higher than in competing nations such as the United States, Ireland and indeed Germany, why are the Government raising taxes yet again with a £1.7 billion increase in national insurance contributions? Does the Chancellor not realise that this tax on jobs will simply create another burden that business cannot afford?

Gordon Brown: I am surprised at the hon. Gentleman. First, we have cut corporation tax from 33 to 30 per cent. Secondly, we have cut capital gains tax from 40 to 10 per cent. in most cases. Thirdly, we have cut small business tax from 23 to 19 per cent. Those are proportionately bigger cuts than have happened in the United States of America. What also surprises me is that the shadow Chancellor, speaking at a meeting only two days ago, praised us and said that our labour market was more flexible than in other European countries. How can the Opposition have two different views at once, or is that merely the basis on which they now proceed?

James Plaskitt: Foreign owners of companies in my constituency tell me that they came to the UK because of factors relating to our flexible labour market, regulatory climate and low tax regime. Does my right hon. Friend agree that while those will continue to be the dominant factors in such decisions, foreign investors in the UK will not indefinitely run a currency risk with the rest of Europe?

Gordon Brown: As I said, a number of issues will determine the future of foreign direct investment. That is why a full analysis is being carried out. It will be published as part of the euro assessment, as I announced to the Select Committee on the Treasury in our evidence at the beginning of September. My hon. Friend must also bear it in mind that one reason why the UK is attractive is not only our tax rates, but the stability of the UK economy. We have now had low inflation for a long time, and while there has been a recession in America, Germany and Japan, our economy has continued to grow. That is one of the reasons why 1.5 million more people are in work than under the Conservatives.

Competitiveness

Adrian Flook: What recent representations he has received on the effect of Government policy on competitiveness of the financial services provided by the City of London.

Ruth Kelly: The Treasury regularly receives representations from many sources about the effect of Government policies on the competitive position of the City of London's financial services industry. The agreement on the taxation of savings secured in Brussels earlier this week by my right hon. Friends the Chancellor and the Paymaster General is a clear demonstration of the positive role that the Government are playing in championing the City.

Adrian Flook: The Minister forgot to mention stamp duty on share transactions. In a globalised market, the City of London operates as a major financial centre, yet that duty affects only British companies, as well as impacting on the value of any individual's pension to a total of £8,000. Will the British Government help to level the field for British companies, and more importantly, help pensioners after the imposition of the disastrous pensions tax introduced by the Chancellor and abolish stamp duty?

Ruth Kelly: I understand the point that the hon. Gentleman is making, but perhaps he could explain to the House why during 18 years of Conservative government, his party did absolutely nothing to reduce or remove stamp duty on shares. Perhaps he could also explain to the House how he would propose to raise the £3 billion revenue—

Mr. Speaker: Order. It is for the Minister to explain the policies of the Government.

David Taylor: Is it not the case that, since 1999, about a third of the international financial service transactions denominated in euros have been carried out in the City of London? Does that not highlight the views of those of us in Labour Against the Euro that the siren voices on the Labour Benches and the eurozealots among the Liberal Democrats are wrong to suggest that membership of the euro is necessary for a successful financial services industry?

Ruth Kelly: The City of London has performed well since the euro was launched. We strongly welcome that. Indeed, it reflects the City's hard work and preparation, with the co-operation of the Bank of England, before the launch. My hon. Friend should be patient and wait for the assessment of the five economic tests, which, as my right hon. Friend the Chancellor has often said, will be published by the end of the first half of this year.

Vincent Cable: How does the Financial Secretary respond to the controversial suggestion by the chairman of the London stock exchange that maximum harmonisation of financial regulation and minimum national discretion is the best way in which to preserve the City's competitiveness in Europe?

Ruth Kelly: I have not heard the comments of the chairman of the London stock exchange, but the Government and the majority of participants in the City do not share the view that the hon. Gentleman outlined. We strongly believe that fair tax competition is the way forward. That is why I emphasised the importance of the agreement that was secured earlier this week and sets a new agenda for sharing information on taxation matters.

Pension Credit

Michael Jabez Foster: What estimate he has made of the number of people who will be eligible in October to receive pension credit in the Hastings and Rye constituency.

Dawn Primarolo: Last year, 3,500 pensioners in Hastings and Rye were receiving the minimum income guarantee. They and others will benefit from the pension credit. Nationally, the Department for Work and Pensions aims to ensure that at least 3 million pensioner households receive their entitlement by 2006.

Michael Jabez Foster: I thank my right hon. Friend on behalf of the pensioners of Hastings and Rye for the enormous difference that the minimum income guarantee has made to their lives. They receive some 30 per cent. more than they would have received under the Conservatives' inflation-only increases.
	I also thank my right hon. Friend for the opportunity for those who have saved to take advantage of the new pension credit, which will ensure that thrift as well as work pays. How will she ensure that each pensioner knows how to make the claims?

Dawn Primarolo: The pensioners who receive the minimum income guarantee will be transferred automatically. We will write to all pensioners to inform them of their entitlement. There will be a national campaign supported by local partners—people who have regular contact with pensioners. Pension Service centres will run surgeries, including drop-in surgeries. I look forward to working with my hon. Friend, my right hon. Friend the Minister for Pensions, and the shadow Chancellor, whose constituency is next door to my hon. Friend's, to ensure that all pensioners receive the massive increase to which they are entitled under the pension credit.

Several hon. Members: rose—

Mr. Speaker: Order. Many hon. Members are standing, but the question relates to only one constituency.

Equitable Life

Norman Lamb: If he will make a statement on Equitable Life.

Ruth Kelly: The Government appreciate the genuine difficulties that many of Equitable Life's current and former customers face.
	The Government recognise the importance of events at Equitable Life. That is why we set up an independent inquiry under Lord Penrose. Our main concern is to ensure that the lessons arising from this situation are learned. That will allow both regulators and the industry to develop the tools that they need to avoid similar incidents in future.

Norman Lamb: I declare an interest as a former policyholder and apologise for not making that clear on the Order Paper. Is not it outrageous that the Penrose inquiry has started interviewing witnesses only this week? What hope is there for the hundreds of thousands of affected people when we have a dog's dinner of four inquiries? They are being conducted by Penrose, the parliamentary ombudsman, the financial ombudsman service and the complaints commissioner for the Financial Services Authority. What are the Government doing to co-ordinate that to provide some hope of an outcome for all those affected?

Ruth Kelly: I must correct the hon. Gentleman's understanding. One full independent judicial inquiry is being conducted into Equitable Life. The other inquiries to which he refers result from independent decisions made elsewhere. They are of interest but not direct concern to the Government. The Penrose inquiry covers 50 years and examines not only the regulator's actions but those of Equitable Life. Lord Penrose made it clear that he is keen to proceed as quickly as possible, consistent with providing a thorough and authoritative account of the relevant period.

Barry Gardiner: I welcome the fact that the inquiry is under way, as will many people, but does my hon. Friend understand the anger and frustration felt by many of the policyholders at the fact that the market value adjusters that have been put on, taken off—with assurances that nothing further would happen—then put back on again, stems from the decision of the chairman and the chief executive to say to the public and to their policyholders that the funds would sustain their profitability in the long term even though there were no new policyholder entrants? Does she agree that that was a fundamental error in their assessment of how to take the company forward?

Ruth Kelly: I certainly understand and sympathise with the distress felt by the policyholders at Equitable Life. The company has made it clear that it considers itself to be solvent, but it has also pointed out to its policyholders and the regulators that there are fundamental uncertainties associated with its accounts. I believe that policyholders recognise, particularly in the light of the difficulties and uncertainties reflected in the global stock market at the moment, that they are not alone in experiencing either exit penalties or cuts in bonus payments. Of course, that does not make it easier for them, but at least it puts the matter into some sort of context.

Stephen O'Brien: It is not sympathy that the Equitable Life policyholders and those with annuities want, it is action. On 12 December, the Minister told the House that Lord Penrose had
	"begun a programme of witness interviews."—[Official Report, 12 December 2002; Vol. 396, c. 388.]
	Yet, in another place on Tuesday, Lord McIntosh said:
	"The inquiry started to interview individual witnesses only yesterday."—[Official Report, House of Lords, 21 January 2003; Vol. 643, c. 554.]
	Those answers cannot both be right. Which Minister misled which House?

Ruth Kelly: The conduct of the inquiry is clearly a matter for Lord Penrose himself. When I made the comments to which the hon. Gentleman refers, that was the information that Lord Penrose had made available to the Treasury. It is clearly an independent inquiry, and I think that policyholders expect a thorough, independent inquiry to be carried out and that all the lessons that can be learned are indeed learned.

Harry Barnes: This involves not only the Financial Services Authority, the parliamentary ombudsman and Lord Penrose; it also involves the Exchequer. The policyholders require a sign that action will be taken to defend their interests, that the Treasury is not just waiting for Penrose, and that something is going to be achieved.

Ruth Kelly: It was clearly an important decision to set up a full, independent judicial inquiry to consider all the circumstances that led to the situation at Equitable Life. Lord Penrose has said that he will not hesitate to allocate blame where blame is necessary. We set up the inquiry to learn all the lessons that we can, so that this situation does not recur. Action is being taken and it will be seen to be taken.

Oil Supplies

Norman Baker: What recent assessment he has carried out to establish the correlation between the cost of oil supplies and the performance of the British economy.

Gordon Brown: In the last five years, Britain has had to cope with an oil price that has ranged from $10 to $35 per barrel. In these circumstances, and given the changing dollar exchange rates, it is all the more important for the growth of the British economy to hold to a disciplined monetary and fiscal policy. OPEC has said that it seeks an oil price of between $22 and $28 and, following the events in Venezuela, it has recently announced increases in its production target of 1.5 million barrels a day.

Norman Baker: Given the global increase in oil consumption, and the fact that the supply of this finite resource is set to peak and be exceeded by demand, which will inevitably lead to further price increases, and that oil is disproportionately found in the volatile middle east, is it not important to the long-term economy of this country that the Treasury should have a strategy to reduce our dependency on oil? What is that strategy? It is not working, because renewable energy generated only 3.1 per cent. of our electricity last year, compared with 3.3 per cent. the year before. We must reduce our dependency on oil. What are the Government doing about that?

Gordon Brown: The hon. Gentleman must wait for the energy paper, but I disagree with him: we have taken measures in successive Budgets to discourage dependence on one sole fuel. I also disagree with his first premise. The international community must act to increase oil supplies at this point, and that is why OPEC made its decision. The initial problem arose from Venezuela, which produces 3 million barrels of oil a day. Ninety per cent. of production has been withdrawn, and it is right to increase production.
	Iraq is responsible for 2.4 million barrels of oil a day, 1.7 million of which are exported. It is also right for OPEC to ensure that its supply is established for the months to come.

Anne Begg: Does my right hon. Friend agree that, while low prices are tempting to motorists, who always want low oil and petrol prices, the British economy—particularly the economy in my area—depends on a relatively high price? If the oil price drops below $8 a barrel, production on the North sea continental shelf shuts down overnight. If the Exchequer is to secure its return from taxation of the oil industry, and if at the same time there is to be a viable oil industry in north-east Scotland and indeed throughout the United Kingdom, the price of oil must be about $20 a barrel, if not slightly more.

Gordon Brown: My hon. Friend, along with her fellow Members representing north-east Scotland, campaigns consistently for the oil industry and the contribution it makes to the British economy. We are still an oil exporter as a result of the wealth in the North sea. We want to encourage the future development of fields in the North sea, and we will continue to pursue a policy that gives the oil industry huge incentives to develop future fields and the new production that is available from the North sea. Obviously we must balance the need to keep the price low to help the growth of the domestic economy with our needs as an oil producer.

Henry Bellingham: Did the Chancellor see yesterday's disastrous figures showing that the number of firms operating below capacity is at a 20-year low? Is that due to oil price increases, or does the Chancellor agree with the Confederation of British Industry, which says that it is almost entirely due to a huge increase in red tape and bureaucracy, which is stifling enterprise?

Gordon Brown: I know it is the hon. Gentleman's policy and that of the shadow Chancellor to suggest that Britain is somehow in recession. The fact is that America has been in recession, Japan has been in recession and Germany has been in recession, while the British economy is growing. The hon. Gentleman should be congratulating us.

Development Aid

Betty Williams: What discussions he has had with (a) Churches and (b) other faith groups about his proposals for increasing development aid to the poorest countries.

Gordon Brown: Meetings to consult on our proposed international finance facility have been held with the major non-governmental organisations. After private discussion with faith leaders, we will put our proposals on additional aid for investment—an increase from $50 billion to $100 billion a year—to a joint seminar with faith groups at No. 11 Downing street. I wish to thank Churches and other faith groups for their continued support for such an initiative.

Betty Williams: I welcome the initiative launched yesterday at Chatham house. Members and friends of Penuel chapel in Bangor, and other organisations in my constituency, will also welcome it.
	Does my right hon. Friend accept that the millennium development goals are very ambitious? Does he agree that if they are to be achieved we must build a strong coalition at local, national and international level?

Gordon Brown: As I said yesterday in the speech that I was privileged to make at Chatham house to a conference on these issues, it is important for a coalition to develop between business, Governments, international organisations, and faith groups and Churches, as well as the NGOs. We are arranging a series of meetings to inform people nationally and locally. Today we are publishing a programme for the international finance facility, which will be sent to all Members of Parliament. I hope that they will be able to inform faith groups and NGOs in their constituencies of what we propose. As I said earlier, I hope that there can be all-party support for the initiative.

John Bercow: In rightly seeking to provide further aid for those who need it most, the Government have specified the importance of streamlining conditionality and enabling greater ownership among emerging markets and developing countries. What did the Chancellor mean by that, what has he done, and what does he intend to do?

Gordon Brown: The whole point of replacing what was called the structural adjustment facility of the International Monetary Fund—which, as the hon. Gentleman knows, was very unpopular with developing countries—with what are called poverty strategy reduction reports is that there is both country and community ownership of the poverty strategies. There is a requirement to consult civil society before the reports are produced. It is conditional on the production of programmes to tackle health and education problems and poverty that grant aid is disbursed by international organisations. Conditionality is now being built into the way in which the World Bank and the IMF view the position, but there is also conditionality in relation to genuine measures to tackle the problems of poverty. The IMF and the World Bank are working closely on that.

Helen Jones: During his discussions, has the Chancellor had any discussions with faith groups on building links with their sister organisations in other countries, particularly in the United States, to urge them to support the millennium development goals? Can he report any progress on urging the United States Government to increase their contribution to development aid and to recognise that to make the world a safer place, there must be a war on poverty as well as a war on terrorism?

Gordon Brown: I agree that a world disfigured by poverty can be neither just nor stable. I think that there is general agreement that action must be taken to deal with poverty. What the United States has done is pledge $5 billion extra aid by 2006. What we are doing is talking not only to the United States Administration but to NGOs and other groups in the United States. I believe that there is to be a joint conference between British and American Churches on aspects of that proposal.

Eric Forth: Meaningless verbiage.

Gordon Brown: From a sedentary position, the shadow Leader of the House says that what we were saying on those things was meaningless. I hope that he will withdraw that allegation.

Peter Lilley: Will the Chancellor take it from someone who spent some years of his life working on development programmes in underdeveloped countries that what the developing countries most need is free access to developed countries' markets, not least in agricultural products, for which the Churches are rightly campaigning? What they do not need is for us to export policies that we now reject in this country, namely, subsidising and protecting our industries. If we recognise that they will not work here, should we not be so demeaning of the underdeveloped countries to suggest that they might work there?

Gordon Brown: It is the opening up of trade and of opportunities for investment that, combined with the programme for aid, will help the developing countries most. The two things must go together. If the developing countries are prepared to open up to trade and to allow private investment to play its role in the development of their countries, we must in turn support them with rises in our aid budgets and with the new international finance facility. The two must go together. I hope that the right hon. Gentleman will support the European Union's anything but arms initiative to open up trade for developing countries, so that we get rid of the agricultural protectionism that has been such a problem. I hope also that he will support what must be the other side of the bargain: the increased resources, so that children can go to school, ill health among babies and mothers can be removed, and poverty can be halved at least.

Industrial and Provident Society Legislation

Gareth Thomas: What plans he has to reform industrial and provident society legislation; and if he will make a statement.

Ruth Kelly: The strategy unit has conducted a review of the legal forms available to social enterprises, including industrial and provident societies. The report made recommendations to improve the current legal framework, which have been the subject of a public consultation. We are currently examining responses received and considering options for taking forward the recommendations.

Gareth Thomas: I am grateful to my hon. Friend for that reply and for the way in which she has engaged with the issue of industrial and provident society reform over the past 18 months, but does she recognise that there remain significant unnecessary differences between the accounting requirements and the insolvency and business rescue requirements of industrial and provident societies and companies? Will she consider what further opportunities there are to make the necessary corrections to those regimes?

Ruth Kelly: My hon. Friend makes important points in respect of industrial and provident society legislation. It is the Government's intention to update that legislation in line, for example, with company law when company law is reformed. It is also important that he drew attention to administration procedures during the recent passage of the Enterprise Bill and secured an enabling clause that will allow us to make the changes that he proposes. We are considering what our priorities for the sector should be and hope to make progress.

Child Tax Credit

Anne Campbell: What representations he has received about the child tax credit.

Dawn Primarolo: Since first announcing the development of the child tax credit and working tax credit in Budget 2000, we have received a large number of representations on all aspects of the system from a wide range of interest groups. We are grateful for the contributions to that process, which assisted in the design of the new tax credits. The Inland Revenue and the Treasury continue to consult informally on a range of tax credit issues, including the child tax credit.

Anne Campbell: Will my right hon. Friend confirm that the new tax credit will mean a welcome and generous increase in family finances? Will she also confirm that it will be paid to the main carer, who is usually the woman, and that that may lead to quite a sharp reduction in some men's pay packets?

Dawn Primarolo: I can confirm that, for recipients of working families tax credit who will also receive the child tax credit, the average increase could be of as much as £12 a week. I can also confirm that the payment will go directly to the main carer—normally the mother—and that that will result in a transfer of moneys from the father to the mother in April of this year. That is in line with the views of most men. According to a recent poll, 64 per cent. of men said that they believed that support should go to the mother, and 70 per cent. believed that the mother was most likely to spend the money on the children. When the transfer occurs in April and mothers receive the money for the first time, I hope that all hon. Members will remember those poll figures, and celebrate the importance of spending money on children.

James Clappison: The Paymaster General and the Government constantly rename and reconfigure the tax credits, but will they bear in mind the importance of take-up? For example, what has been the take up, proportionately, of the baby tax credit introduced in April last year?

Dawn Primarolo: I am glad that the hon. Gentleman will support the Government in ensuring that his constituents receive all the money to which they are entitled. I am grateful to hear that he is so concerned to ensure that that take-up takes place. I can confirm that the current tax credits have received a higher take-up than any of the family credit obligations under the previous Conservative Government. Some 800,000 people receive family credit, and 1.3 million people already receive working families tax credit. Millions more will receive the tax credit. We must ensure that they all enjoy the support of the House, and of the hon. Gentleman.

Government Resources (North-east)

Vera Baird: What plans he has to further increase Government resources going into the north-eastern region.

Paul Boateng: Details of regional distributions of historic Government spending are published annually in the public expenditure statistical analyses. The Government's spending plans for 2003–04 to 2005–06 were set out in the White Paper published last July following the 2002 spending review. This will result in an increase in Government resources going to the north-east region.

Vera Baird: I am grateful to my right hon. Friend for that answer, but he will appreciate that, despite the considerable efforts that the Government have made and continue to make, the north-east remains firmly at the bottom of almost every national economic league. Is not it time to kick start our region's economy by relocating at least one Government agency or Department away from overheated London and up to our lovely region? That would be very welcome in Redcar.

Paul Boateng: My hon. and learned Friend makes a good point, and I am sure that those with direct responsibility for the location of Government offices will hear what she says on behalf of her constituents. She will welcome the fact that we are taking action to reduce imbalances between and within regions, especially in respect of her region. We have given the regional development agencies increased funding and flexibility. There has been an indicative allocation rise for her own RDA, from £227 million in this year, to £240 million in 2005-06. That will help to address the problem that she has rightly pointed out.

Anne McIntosh: The Chief Secretary will be aware that Teesside airport in the north-east region does not enjoy a direct rail link. Would the Government prefer the limited amounts of public funds available to be put into establishing a rail link to an existing airport, such as Teesside, or would they prefer a completely new airport to be constructed at Finningley?

Paul Boateng: The hon. Lady makes an important and serious point, which will no doubt be considered by the responsible Department. I have no doubt that the Department of Transport will take into account what she says.
	What is interesting, however, is that this is a call for yet more public spending from a party that purports to be committed to reducing public expenditure. It cannot have it both ways. Simply to say that it is a saving is to fall into the same trap as the hon. Member for Arundel and South Downs (Mr. Flight) fell into. He landed his party with a commitment to cut 20 per cent of—

Mr. Speaker: Order. Mr. Cousins.

Jim Cousins: For over 100 years Scotland and Wales have had special arrangements reflecting their special needs—and quite right too—and the ability to make local national priorities within those allocations of things that the people of those areas thought it was right to focus upon. When can the north-east region expect to have the same arrangements?

Paul Boateng: My hon. Friend makes a serious point that reflects his own passion for regional government. He will have welcomed the announcements made by my right hon. Friend the Deputy Prime Minister in that regard.

Business of the House

Eric Forth: May I ask the Leader of the House please to give us the business for next week?

Robin Cook: The business for next week will be as follows:
	Monday 27 January—Second Reading of the Electricity (Miscellaneous Provisions) Bill. Followed by a motion to establish a Select Committee on the Lord Chancellor's Department.
	Tuesday 28 January—Second Reading of the Railways and Transport Safety Bill.
	Wednesday 29 January—Motion to take note of the outstanding reports of the Public Accounts Committee to which the Government have replied. Details will be given in the Official Report.
	Thursday 30 January—Opposition Day [4th]. There will be a half-day debate on humanitarian contingency for Iraq on an Opposition motion.
	Friday 31 January—Private Members' Bills.
	The provisional business for the week after will be:
	Monday 3 February—Remaining stages of the European Parliament (Representations) Bill.
	Tuesday 4 February—Consideration of the First Report Session 2002–03 (HC 171) from the Joint Committee on House of Lords reform.
	Wednesday 5 February—Motion on the Police Grant report (England and Wales) 2003/2004.
	Motions on the Local Government Finance Report (England) 2003/2004 and the Local Government Finance Report (England) 2001/2002: Amending Report 2003.
	Thursday 6 February—Consideration in Committee and remaining stages of the Electricity (Miscellaneous Provisions) Bill.
	Friday 7 February—Private Members' Bills.
	I should also like to inform the House that the business in Westminster Hall in February will be:
	Thursday 6 February—Debate on Southern Africa food crisis.
	Thursday 13 february—Debate on legal and advice service tackling social exclusion.
	Thursday 27 February—Debate on the nineteenth Report from the Transport, Local Government and the Regions Committee, Session 2001–02 on the New Towns; their Problems and Future (HC 603) and the Government Response (CM 461).
	On Thursday 16 January, I informed the House that it was planned to hold the next meeting of the Committee on the Convention on the Future of Europe on Wednesday 29 January at 2.30 pm to consider the fifth and sixth reports of the United Kingdom representatives to the Convention. To avoid a clash with a pre-arranged meeting of the Praesidium of the Convention, it is now proposed that the Committee on the Convention on the Future of Europe meet instead on Wednesday 12 February at 2.30 pm.
	The information is as follows:
	
		PAC Report 2001–02
		
			 Report No. Title of Report Publication Date 
			 1st Managing Risk in Government Depts 23 November 2001 
			 2nd Improving Construction Performance 5 December 2001 
			 3rd The Cancellation of the Benefits Payment Card Project 6 December 2001 
			 4th The Renegotiation of the PFI-type Deal for the Royal Armouries Museum in Leeds 12 December 2001 
			 5th MOD: Major Projects Report 2000 28 November 2001 
			 6th MOD: Major Projects Report 2000—The Role of the Equipment Capability Customer 28 November 2001 
			 7th Sale of Part of the UK Gold Reserves 19 December 2001 
			 8th OFWAT: Leakage and Water Efficiency 4 January 2002 
			 9th Tackling Obesity in England 16 January 2002 
			 10th The Acquisition of German Parcel 11 January 2002 
			 11th OFGAS: Giving Domestic Consumers a Choice of Electricity Supplier 17 January 2002 
			 12th The Radiocommunications Agency's Joint Venture with CMG 23 January 2002 
			 13th Regulating Housing Associations' Management of Financial Risk 9 January 2002 
			 14th The Millennium Dome 1 February 2002 
			 15th How English Further Education Colleges can Improve Student Performance 7 February 2002 
			 16th Access to the Victoria and Albert Museum 14 February 2002 
			 17th MOD: Maximising the Benefits of Defence Equipment Co-operation 15 February 
			 18th Inland Flood Defence 1 March 
			 19th Ship Surveys and Inspections 15 March 
			 20th Educating and Training the Future Health Professional Workforce for England 8 March 
			 21st Better Value for Money from Professional Services 14 March 
			 22nd The Channel Tunnel Rail Link 21 March 
			 23rd Inland Revenue Appropriation Account 1999–2000 22 March 
			 24th MOD: Risk of Fraud in Property Management 20 March 
			 26th Better Regulation: Making Good Use of Regulatory Impact Assessments 12 April 
			 27th Medical Assessment of Incapacity and Disability Benefits 10 April 
			 28th Better Public Services Through Joint Working 18 April 
			 29th Non-Competitive Procurement in the Ministry of Defence 19 April 
			 30th The Auction of Radio Spectrum for the Third Generation of Mobile Phones 26 April 
			 31st Postcomm: Opening the Post 1 May  
			 32nd The Implementation of the National Probation Service Information Systems Strategy 3 May 
			 33rd Income Tax Self Assessment 9 May 
			 34th Policy Development: Improving Air Quality 24 May 
			 35th Losses to the Revenue from Frauds on Alcohol Duty 17 May 
			 36th Progress on Resource Accounting 19 June 
			 37th Handling Clinical Negligence Claims in England 13 June 
			 38th NIRS2: contact extension 7 August 
			 39th Giving Confidently: The Role of the Charity Commission in Regulating Charities 3 July 
			 40th NHS Direct in England 10 July 
			 41st Ministry of Defence: Major Projects Report 2001 4 July 
			 42nd Managing the relationship to secure a successful partnership" in PFI projects 1 July 
			 43rd The use of funding competitions in PFI projects: The Treasury Building 17 July 
			 44th The misuse and smuggling of Hydrocarbon Oils 18 July 
			 45th Inpatient and Outpatient Waiting in the NHS 18 September 
			 46th Inappropriate adjustments to NHS Waiting Lists 18 September 
			 47th The New Landfill Tax Credit Scheme 25 July 
			 48th Helping to reduce world poverty 31 July 
			 49th Ensuring that policies deliver value for money 31 July 
			 50th Pipes and Wires 8 August 
			 51st Agricultural fraud: the case of Joseph Bowden 22 August 
			 52nd e-Revenue 29 August 
			 53rd Reducing prisoner reoffending 5 September 
			 54th Improving public services through e-services 28 August 
			 55th Fraud and Error in Income Support 11 September 
			 56th Ministry of Defence Combat Identification 21 August 
			 57th The operation and Wind-up of Teesside Development Corporation 14 August 
			 58th Improving Student achievement and widening participation in higher education in England 12 September 
			 59th Delivering the commercialisation of the public sector 15 August 
			 60th Royal Travel by air and rail 4 September 
			 61st The management of surplus property by trusts in the NHS in England 19 September 
			 62nd The New Deal for Young People 9 October 
			 63rd Construction of Portcullis House, the new Parliamentary Building NB Replied to by House of Commons as an HC Paper 24 July

Eric Forth: I am grateful to the Leader of the House for that statement, and particularly for the news about the Praesidium, which I am sure excited us all hugely.
	Today being Thursday—[Hon. Members: "Well spotted"]. I see that I have woken up some hon. Members.
	Today being Thursday, we have of course had departmental questions from 11.30 am to 12.30 pm, and now we shall have business questions for however long you deem appropriate, Mr. Speaker. Then a statement is to follow.
	By my calculations, that means that for the legislative business before us, a very important Bill to which we are supposed to give our full legislative attention as a House of Commons, we shall have about three and a half hours to consider the seven groups of amendments that you have selected, Mr. Speaker. The arithmeticians among us will readily calculate that that is about 30 minutes per group. That is the amount of time the Government have seen fit to allow the House to do its job of scrutinising legislation—30 minutes for each group of amendments to a Bill for the entire House to give its attention, including all speeches and all consideration. That is the result of the so-called modernisation process, whereby to get Members out of this building as quickly as possible on Thursdays, we are now reduced to that sort of business.
	If the Leader of the House will not turn back the clock—that is a bit much to expect at this stage—can we have protected time for our legislative duties? That is all I ask, given that we must have statements from Ministers and so on. Surely, it is more important that we do our job as a legislature than that we all go home early on Thursdays. Therefore, I ask the Leader of the House to give this matter his urgent attention, and I hope that he will give us an undertaking about protected time for legislation.
	Yesterday, as reported at column 322 of Hansard, my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) pointed out that a written ministerial statement by the Deputy Prime Minister has been sneaked out on the very important subject of reduced right-to-buy discounts—something that affects all Members of Parliament and their constituents—yet, to date, we have no opportunity to question the Deputy Prime Minister. We are left with the written ministerial statement and, so far, nothing else. Is that how we shall conduct our business in future? Is the Deputy Prime Minister afraid of the House? Is he ashamed of what he said in his written ministerial statement?
	Why is the Deputy Prime Minister allowed to hide behind the written ministerial statement procedure and not come to the House to say what he wants to do and be questioned by Members of Parliament on behalf of their constituents? That is the missing piece in all this. I do not want to hear the Leader of the House say, "Oh well, written ministerial statements are better than the old planted questions", which were their predecessors. I want him to tell us when the Deputy Prime Minister will come to the House to answer for his policies, instead of hiding behind that sordid little parliamentary device.
	You will recall, Mr. Speaker, that during business questions on 16 January, duly recorded at columns 819 and 820 of Hansard, I raised the matter of the Secretary of State for Defence having somehow allowed to get out into the public domain the matter of Fylingdales on which he was going to make a statement the following day.
	On 20 January, my right hon. Friend the Member for East Yorkshire (Mr. Knight)—who is in his place beside me—returned to this issue and said with regard to the Secretary of State for Defence that the statement on troop deployment
	"was widely trailed in the Sunday newspapers and in today's media. This appears to be a recurring pattern with the current Secretary of State."
	As reported in the same column of Hansard, one of your Deputies, Mr. Speaker, said:
	"Mr. Speaker is well aware of the matters to which he has referred, and is deeply concerned about them. I understand that he intends to take them up with the Ministers concerned." —[Official Report, 20 January 2003; Vol. 398, c. 47.]
	That was bad enough, but on 22 January—yesterday—my right hon. Friend the Member for Fylde (Mr. Jack) was again obliged to raise a point of order with you, Mr. Speaker, in which he said that
	"on the BBC News website, there was a headline saying "University Funding Shake-up Unveiled."
	So what the Secretary of State for Education and Skills was going to say in the House was widely known in the media before he came here. You, Mr. Speaker, said:
	"I share the right hon. Gentleman's concern about this matter. He has written to me; I shall investigate and report back to the House." —[Official Report, 22 January 2003; Vol. 398, c. 320.]
	The Leader of the House shares with you, Mr. Speaker, a responsibility for guardianship of the role of the House of Commons vis-à-vis Ministers, but we are now witnessing casual, serial disregard of the role of the House by Secretaries of State. I should like to hear from the Leader of the House what is he going to do—along, I hope, with you, Mr. Speaker—to force Secretaries of State to drop that practice, to have proper regard to parliamentary process and to come to the House to allow Members of Parliament to hear matters before the rest of the world hears about them.

Robin Cook: I think that I can begin by agreeing with the right hon. Gentleman that this is Thursday—everything else is rather more conditional than that.
	First, we rise at 6 o'clock on Thursdays because the House voted for that, and I remind the right hon. Gentleman that it did so by the largest majority for any of the propositions on which the House voted on that day. I would totally deprecate any suggestion that Thursday therefore becomes some kind of second-class day; it is a full day of parliamentary time. It is very important to demonstrate to the world that we are taking business on Thursdays in the same way as we do on any other sitting day at Westminster.
	On the statement on the right to buy, I cannot but rise to the right hon. Gentleman's claim that this is a sordid device. It is vastly more transparent and open than the system of planted questions that it replaced and which was used extensively by the right hon. Gentleman and his colleagues in the 18 years when they were in office. It has always been the case that at times Government statements will be made in written form in Hansard rather than orally from the Dispatch Box. As for yesterday, when the written statement was made, there was a full, major oral statement on higher education in the House. It is simply not possible for me to arrange for every Government statement to be done orally from the Dispatch Box. If it were, I would have the right hon. Gentleman complaining that we did not have enough time to scrutinise legislation properly. I am pleased to inform the right hon. Gentleman that the Deputy Prime Minister answers questions in the House next Wednesday and will be happy to answer questions on the right to buy or any other issue. As a result of the changes and modernisation, which the right hon. Gentleman constantly deprecates, it is now possible for Members, having seen that written statement, to table an oral question on that subject in time for the exchanges next week.
	On the issue of press speculation before oral statements in the House, the reports in the press that preceded the statement on troop deployments did not in any way reflect the full nature of the statement. Many were quite wrong. None was accurate about my right hon. Friend's statement. The statement on the BBC website about the forthcoming higher education statement was wildly wrong. I cannot stop the BBC and newspapers speculating about what might be said in Parliament. We live in a free country with a free press. I was gratified when I tuned in to the "Today" programme on the day of the higher education statement to hear it lament that it had been unable to get a Minister to come and comment on the forthcoming statement. I welcome that. It shows that Ministers fully understand the importance of speaking to this House before the media.

Paul Tyler: May I support the request for a debate on the forced sale of rented accommodation at a substantial discount in areas such as the south-west? It has caused untold misery to those seeking affordable housing. It is a proper request and I am delighted that the Conservatives would wish to expose their absurdity in that particular matter.
	Will the Leader of the House take the opportunity now or at least before the debate announced for 4 February to reiterate the Government's position on the reform of the House of Lords? I do not know whether in his busy morning he had an opportunity of to read the speech—I suppose it was a speech, but it was actually an extraordinarily bloodcurdling diatribe—from the Lord Chancellor. Yesterday in the other place the Lord Chancellor referred to an imaginary centre of gravity. It is the centre of gravity which the Leader of the House is constantly urging us to reach. On a number of occasions during that extraordinary speech the Lord Chancellor made peculiar references to the issue of hybridity. For example, he referred to
	"my mission in this debate to save us from the parliamentary disaster of hybridity."—[Official Report, 22 January 2003; Vol. 643, c. 831W.]
	He then made some other references to that. Does the Leader of the House accept that in making this extraordinary statement the Lord Chancellor has not only ignored the mandate of the Labour Party at two successive general elections, but torn up the White Paper to which he put his own name and which advocated hybridity and mixed membership, and ignored the advice of the royal commission set up by the Government, the Public Administration Select Committee of this House and the report of the Joint Committee of both Houses which, in theory at least, his House was debating yesterday as we did on Tuesday? Can the Leader of the House now give us an absolute guarantee that the Members of the other place, who after all have a lot of self-interest in this matter, will not be allowed a veto—that the turkeys will not be allowed to vote against Christmas?

Robin Cook: First, I welcome the hon. Gentleman's support for the measures that we are taking to curb abuse of the right to buy—[Interruption.] Abuse is the correct word. Private speculative companies are going round putting up money on an agreement with tenants that they will purchase the houses from them three years subsequently. That is happening, and I would be sorry if any Member of the House, even among the Conservative party, did not recognise that that is an abuse, and one that we are right to try to curb. The hon. Gentleman said that in some areas of acute housing demand, a real crisis of social housing is being created. That is why, in a limited number of target areas, the Deputy Prime Minister has acted. Some of his proposals will require primary legislation, full debate and examination in this House, in the course of which the hon. Gentleman will have other opportunities to make those excellent points, with which we fully agree.
	I have not, as yet, studied fully the Lord Chancellor's speech so I cannot therefore say whether it is a bloodcurdling diatribe. On the whole, however, bloodcurdling diatribes are better studied in the hours of darkness than in the morning. On the question of the centre of gravity, I stress to the House that it is important that all of us—this is not just a matter for me, the Lord Chancellor or the Government—try to identify our centre of gravity on 4 February. That will require Members to show some flexibility, not necessarily insisting on their first and best priority, but finding common ground with others on where the best compromise can be found with the largest support for reform of the second Chamber. I would be surprised if that compromise did not require some form of mixed membership. A year ago, the Government committed themselves to mixed membership of the upper House when we proposed 20 per cent. elected and 80 per cent. appointed. It is not my impression that that White Paper was unpopular because it proposed 20 per cent. elected members; the difficulty with public opinion was in relation to the 80 per cent. appointed. I am doubtful about whether we will remove those anxieties on the part of public opinion by going for 100 per cent. appointed.

Lindsay Hoyle: Will my right hon. Friend allow a debate on the reopening of the custody suite at Chorley? It seems absurd that a population of 100,000—a constituency of 80 square miles—does not have lock-up facilities for the police, and that prisoners must be taken to Skelmersdale, which is way outside the constituency. That takes much-needed police off the streets: two policemen are required when someone is arrested.

Robin Cook: I fully understand the anxiety of my hon. Friend, which he expresses forcefully, on behalf of his constituents. In the first instance, as he will appreciate, this is a matter for the local police authorities, not for me, and it would be wrong for the Government to insist on the precise location of police cells. I am sure that his request will be well reported in his locality and will be heard.

Andrew MacKay: Inevitably, the Foreign Secretary's mind is on the fight against terrorism and the situation in Iraq. Can I urge, however, that he does not take his eye off Zimbabwe? Will the Leader of the House arrange for a Foreign Office Minister to come to the Dispatch Box next week? First, can the House be assured that we will veto Mugabe's visit to Paris, apparently on President Chirac's extremely unwise invitation? Secondly, can we have a fuller response than the one that we received in Westminster Hall, when Ministers said that they were sympathetic to tougher and tighter smart sanctions against the regime, including against business men who are funding that regime?

Robin Cook: First, I say to the hon. Gentleman—[Hon. Members: "Right hon. Gentleman."] I stand corrected. May I say to the right hon. Gentleman that I fully share his view on the importance of upholding the ban on travel by Mugabe and his associates? Currently, 79 of them are named in the EU ban, and it is important that that ban is upheld and observed by all 15 countries that voted for it, including France. In Monday's meeting of the General Affairs Council, I understand that there will be a debate on taking forward the extension of that ban, which will expire next month unless such a decision is taken. Britain will of course seek to make sure that that ban is extended, and I want that ban to be upheld fully by all member states of the European Union. We will continue to review what sanctions we can take against Zimbabwe that will bring home to the regime our total condemnation of the way in which it is behaving and our particular abhorrence of the way in which it is interfering, with political motivation, in the distribution of food. No civilised person could possibly uphold the idea that food should be denied to people because of the way in which they had voted in the past. We are, of course, also very sensitive to the fact that any decision that we take must not increase the hardship and suffering of the people of Zimbabwe. We want to show that Britain is on their side. Our enemy is not the people of Zimbabwe; our concern is the regime in Zimbabwe.

Vernon Coaker: May I congratulate my right hon. Friend and all those involved in the decision on the fact that, today and for the first time, there will be a cross-departmental question time in Westminster Hall on youth policy? When he considers the future business for Westminster Hall, may I urge him to learn from this example and to consider whether we can hold many more of this type of question time?

Robin Cook: I am very glad that we are holding the innovative cross-cutting question session. That is one of the products of the modernisation agenda that the right hon. Member for Bromley and Chislehurst (Mr. Forth) keeps condemning. I congratulate my hon. Friend on his part in pressing for this. I very much hope that hon. Members will take part in the session in the spirit in which it is offered. It will provide an opportunity for an informal, reflective exchange of views that can take place not necessarily with the party-political heat that is associated with this Chamber. I am conscious of the fact that the debate will be watched by much of the youth press and by many young people to see how seriously Parliament takes political issues and the political views of young people. If it is a success, as I hope that it will be, we will certainly look for opportunities to repeat this experiment in Westminster Hall.

George Young: To return to the debate that the Leader of the House has announced for 4 February—the second leg of the two-day debate on House of Lords reform—he will recall that, in his important contribution to the debate on Tuesday, he repeatedly referred to the Labour manifesto that committed the party to a more democratic upper House. Against that background, can he give the House an unequivocal assurance that there can be no question of the Prime Minister voting for a wholly appointed second Chamber?

Robin Cook: I would not seek to give an assurance on behalf of any Member of the House. Seven options will be before the House and any Member is open to vote for any of those seven options. I have made my position clear from the Dispatch Box, and I will do so again on 4 February. There is no collective Government view on the matter, and I would deprecate any attempts to read into the expression of view of any one member of the Government a collective view on behalf of everybody else.

Tom Watson: After yesterday's statement on higher education, will my right hon. Friend consider a debate on student funding? Many Labour Members seek reassurance from my right hon. Friend the Secretary of State for Education and Skills that his proposals to allow vice-chancellors to charge differing fees will not mean that kids from the poorest backgrounds will be priced out of going to the best universities.

Robin Cook: I fully understand that there is great interest in the House in yesterday's statement. I am sure that we will have a number of other opportunities to reflect on and explore its proposals. I invite my hon. Friend to give credit to my right hon. Friend the Secretary of State for Education and Skills for those elements of the proposals that will particularly assist children who come from the socio-economic groups that are under-represented at university. First, pressure will be applied to make sure that all universities take seriously their obligations to ensure that they offer fair access and seek to open their doors to people who may not have traditionally gone to them. Secondly, the abolition of upfront fees will be a material consideration to students from poorer backgrounds. Perhaps most important of all, the reintroduction of maintenance grants will apply to the students that my hon. Friend mentioned. That means that 30 per cent. of all students will receive a maintenance grant of £1,000. At present, they do not get it, and it will make quite a difference to a number of students who are considering whether they can afford full-time education at university.

Richard Younger-Ross: May we add our congratulations to the Leader of the House on the decision to hold a cross-cutting debate on youth policy? I am sure that it will be a success. What other subjects is he considering for future debates? Will it be possible to hold questions on vocational education? I ask that, because he might not be aware that agricultural courses are being cut across the country. In my constituency, we have the proposed closure of Seale Hayne college, and it would be helpful if Ministers from the Department for Environment, Food and Rural Affairs and from the Department for Education and Skills could come along to discuss access to agricultural education.

Robin Cook: The hon. Gentleman makes his constituency point elegantly. I am not sure that it quite adds up to a case for a cross-cutting question session in Westminster Hall. However, I am sure that he will find other opportunities to pursue the matter.
	On the hon. Gentleman's question about process, I welcome his support for the innovation that is taking place in Westminster Hall. We will look for other subjects of a broad cross-cutting character that might provide a parallel to the current experiment on youth questions. We will, of course, have to discuss the matter with the Chairman of Ways and Means and seek his agreement. We will carry forward the dialogue in the light of today's question session.

John McDonnell: My right hon. Friend will be aware that there is almost a feeding frenzy in the City over the sale of Safeway. That has important ramifications for employment in west London where up to 1,300 jobs are at risk, with 2,000 to 3,000 jobs being at risk around the country. That could result in a near monopoly situation in the retail sector. Can we have an urgent debate on this matter in the coming week, so that we can examine the powers that the Government have to intervene in this matter?

Robin Cook: My hon. Friend draws attention to the many bids that are in for Safeway. I fully understand his constituents' apprehension about what that might mean in terms of employment in his region. We have well-developed mechanisms to maintain competition policy, and the Government have acted to make sure that we streamline and strengthen the requirements of competition policy. Any bid will have to be assessed through those mechanisms in the normal way. I certainly assure him that Ministers will be conscious of the consequences for employment of any such bid. Should there be significant consequences, we will want to look to how we can help any affected area in the way that we have repeatedly done wherever there have been employment consequences before.

Christopher Chope: The week after next, we are due to debate the local authority grant settlement. Can the Leader of the House tell us when the final settlement will be announced? At the moment, representations are being made about how unfair the provisional grant is to Dorset in particular, and I would be interested to know when we will hear whether the Government have taken into account the representations that have been made. When will the people of Christchurch, who have been singled out in the whole west country by being effectively deprived of their right to buy, have the chance through their elected representative to make representations to the Government on this important issue?

Robin Cook: The debate on the local government settlement takes place not next week, but the week after. I fully understand the importance of all hon. Members seeing the final settlement well in advance of the debate, and I will make sure that that point is conveyed to the Department.
	On the other point that the hon. Gentleman raises, the written statement made it clear that some of the issues will be taken forward by order and that others will have to wait for primary legislation. Either way will give hon. Members the chance to make what representations they wish. In the event that Conservative Members wish to make representations against the steps that we are taking and to do so on behalf of those who are speculating unreasonably and abusing the system and to maintain the situation in which there is excessive pressure on social housing in their constituencies, I am sure that not only we will wish to hear that. Many of their constituents will wish to hear it, too.

Mike Gapes: May we have an early debate on the role of political parties in helping the vulnerable? In particular, can my right hon. Friend arrange that all Members of Parliament from the borough of Redbridge are able to take part in such a debate? We would then be able to discuss the closure of the mental health day care centre in my constituency by the Conservative council in the London borough of Redbridge where the Leader of the Opposition is, of course, a Member of Parliament.

Robin Cook: I am tempted to respond to my hon. Friend's proposal so that all of us can hear more fully of the difficulties of living with a Conservative council and about the priorities of those councils, which are not necessarily helpful to the vulnerable in the community. I recall that, last year, the Leader of the Opposition urged all Conservative Members to spend a week with the vulnerable in their constituencies. It is a matter of regret that, my opposite number, the right hon. Member for Bromley and Chislehurst, has not yet reported to us on his week with the vulnerable in Bromley. We might invite him to reflect on that and to report more adequately next Thursday when we meet again.

Andrew MacKinlay: Will my right hon. Friend give more consideration to persuading Ministers to allow more notice to be given of the Committees considering statutory instruments and delegated legislation? At present, we have minimal notice and people are put on the Committees even though they do not want to serve and know nothing about the subject. However, there are also Statutory Instruments Committees for which we would like to volunteer because we are interested in the subject. It is not beyond the capacity of man to organise a system that provides a longer running time for such Committees. That would help to make the Committees meaningful rather than the charade that they are. That is particularly true for Northern Ireland matters where whole Acts of Parliament are considered in Statutory Instrument Committees. Finally, the Northern Ireland Grand Committee is due to meet. What will be its business?

Robin Cook: On the period of notice, I am advised by the Deputy Chief Whip that that has been doubled from the traditional one week to two weeks for Statutory Instrument Committees. That should help hon. Members. Indeed, it is unusual for us to have more than two weeks' notice of forthcoming business.
	On Northern Ireland Orders, we are conscious of the problem for the House, and the particular problem for those who represent Northern Ireland constituencies, of trying to replicate the system of consideration that was available when the Northern Ireland Assembly was in being. We are frank about the fact that we cannot do that in full, but we are considering ways in which the Northern Ireland Grand Committee could be strengthened and whether there are other ways to handle the problem.

Andrew MacKinlay: What business is planned for the Northern Ireland Grand Committee?

Robin Cook: When I have the details, I will ensure that my hon. Friend is advised of them.

Nicholas Winterton: The Leader of the House is concerned about whether this country, together with the United States, enters into a conflict in Iraq. He knows that all hon. Members are also increasingly concerned about it and interested in it, as are the people of this country. Despite the Government's right to use the royal prerogative, is not it possible for the House to have the opportunity to debate Iraq and whether we should enter into a conflict with it on a substantive motion so that our people, especially the forces that will be committed, know that our troops have the full support of the House and the people of this country in the event of war?

Robin Cook: As I have said a number of times, it is inconceivable that any Government would commit British forces to action without the full support of the House of Commons. No Government would commit forces to military action in the event of any doubt about that support.
	The hon. Gentleman will be aware that we have repeatedly said that we have no problem with a vote on a substantive motion on the commitment of forces. We would welcome that and would arrange it. However, we have a responsibility to the military forces on the precise timing of that. If it can be done in advance, then good and well, but there are obvious inhibitions on introducing a motion that commits British forces to a secret attack at 2 am next Thursday. We must have some flexibility on when the vote may take place. There is no doubt in our minds, and there can be none in the mind of any hon. Member, that action involving military forces must be taken with the support of the House.

Roy Beggs: May I bring to the attention of the Leader of the House early-day motion 558?
	[That this House remembers with deep sadness the Omagh bombing of 15th August 1998 in which 31 people, including seven children and two unborn babies, were murdered by the Real IRA; commends the courage of the families of the victims of this bombing in launching an unprecedented civil legal case against five named individuals, suspected of planting the bomb, and the Real IRA; urges the public to continue to contribute to the Omagh Victims' Legal Trust which still requires money to fund the case, expected to be heard in Belfast High Court later this year; and condemns the decision to grant legal aid to two of the suspects, Michael McKevitt and Liam Campbell, who are both known to be very wealthy men as a result of their lifelong involvement in terrorist activity.]
	According to the Daily Mail, two suspects for the Omagh bombing, Michael McKevitt and Liam Campbell, believed to be prominent leaders of the Real IRA and who have become wealthy men through terrorist crime, are to be granted legal aid paid for by British taxpayers. The early-day motion condemns that. It is outrageous that legal aid should be provided for those suspected of being responsible for the murder of 29 people and two unborn children when private finance has to be raised to support the victims of that crime who can get justice only through an unprecedented civil action. Can time be made available to consider whether the legal aid regulations require amendment so that suspects and victims are treated equally under the law?

Robin Cook: I fully understand the hon. Gentleman's concern and I am grateful to him for giving me advance notice of his question. I think all hon. Members will agree that, as a matter of principle, anyone who is brought before our courts and charged with a serious offence, such as murder, should be defended. That is an important principle of our criminal justice system. In the event that they cannot afford the defence themselves, it is right also that that should be made available to them at the expense of the state.
	The hon. Gentleman says that the two accused people are wealthy. If the Daily Mail or anyone else has evidence that they may not have made a full declaration of their assets to the Legal Aid Board, I urge them to share that with the police and the Legal Aid Board. A false declaration not only cheats the legal aid system, but is a criminal offence.

Fiona Mactaggart: On Tuesday, I mistakenly criticised your office, Mr. Speaker. I also made another error at column 258 when I wrongly claimed that Lord Lipsey had changed his view on the composition of the House of Lords, for which I apologise. I have also written to him to apologise. Will the Leader of the House allow me an opportunity to set the record straight by confirming that the noble Lord has not changed his unfortunately mistaken views following his elevation to another place?

Robin Cook: rose—

Andrew MacKinlay: Say, "I agree. I concur with my hon. Friend."

Robin Cook: I am most grateful to my hon. Friend for his prompt. He will forgive me if I do not instantly reach out for it.
	I am glad that my hon. Friend the Member for Slough (Fiona Mactaggart) has had the opportunity to put right the record on Lord Lipsey's views. I am sure that he will be appropriately grateful to her for that. I doubt whether her exchange with him has changed either his views or her own. Going through the debate of the past two days, however, I was encouraged to note that about one in three of those who spoke in the other place expressed some support for an elected element within the second Chamber. That is substantial progress on the position a year ago. Although Lord Lipsey may not have changed his views, I am encouraged that there is a certain tide—or at any rate a gentle breeze—in the second place which we must try to encourage.

Mark Francois: Will the Leader of the House find time for an early debate on job losses, because it would give me an opportunity to highlight the unfortunate decision announced by Powergen this week to make 210 of my constituents redundant at the facility in London road, Rayleigh? I am sure that he will appreciate that I am extremely concerned about that decision and am keen to do what I can to protect my constituents' interests, including by raising the matter in the House.

Robin Cook: The hon. Gentleman is absolutely right to express the concerns of his constituency and community at that loss of jobs. I assure him that, as always, Departments will be willing to consider what might be appropriate by way of assistance to his community to cope with the consequences of a localised redundancy of that order. We are well aware of the difficulty that individuals and communities face as a result of job losses, but we take some pride in the fact that since we have been in office, 1.5 million more people are in work than there were at the time of the 1997 general election, 250,000 of whom came into work in the past year alone.

Diane Abbott: I thank my right hon. Friend for making time for a debate on defence yesterday, when many of my hon. Friends and colleagues made a series of excellent speeches against a war with Iraq.
	The hon. Member for Congleton—

Nicholas Winterton: Macclesfield.

Diane Abbott: I apologise.
	The hon. Member for Macclesfield (Sir N. Winterton) said that it is important to have a vote in the House on a substantive motion. It is also important that that should take place before British troops are dispatched to war. The House is aware that there is no precedent for that in recent times, but it is highly unlikely that the tens of thousands of American and British troops massed on Iraq's borders will attack in secret, as my right hon. Friend suggested. The country does not understand why it is possible to dispatch British troops in such a major deployment without a vote in the House on a substantive motion before it happens.

Robin Cook: First, my hon. Friend draws attention to the fact that the House had an interesting debate yesterday in which the issues were again fully ventilated. That was one of a number of debates in the House on the subject, including one before Christmas when the Government put a substantive motion before it. At that time, the House massively endorsed our approach to ensure that we conduct the management of the crisis in Iraq through the United Nations, to which it also gave its full support.
	I have no doubt that the House will discuss the issue on a number of other occasions. Indeed, this Administration was punctilious in ensuring that it had many opportunities to discuss issues that affected the deployment of British troops in Afghanistan and Kosovo. We will certainly do the same in relation to Iraq. Whether the vote on the commitment of military troops will take place before or after they are put into action will be judged at the time, but there can be no question whatsoever of the British Government committing British troops if there is any doubt about us securing support for that within the House of Commons.
	It is important that we remember also that the matter may not necessarily end with the commitment of military troops. The strategy for which we voted involved ensuring that we uphold the UN resolution. If we can secure the compliance and co-operation of Saddam, there will be no need for the UN to authorise military action to uphold that resolution. The key to making progress and avoiding war rests not in this Chamber, but with Saddam Hussein in complying with his obligations under the resolution.

John Bercow: May we please have an urgent debate in Government time on the effect of prison overcrowding on rehabilitation programmes for persistent offenders? Given that the prison population is projected to rise from approximately 72,000 now to 109,000 by 2009, that purposeful activity in prisons has consistently declined since this Government took office in 1997, and that 84 per cent. of 14 to 17-year-old thrice-convicted offenders are reconvicted within two years of their release from custody, is not it important that this House has the opportunity to debate the centrality to public policy of rehabilitation programmes if we are to create a peaceful society and the law and order for which all democratically elected legislators rightly pray?

Robin Cook: I fully understand the hon. Gentleman's concern about overcrowding in prisons; it is shared on both sides of the House. I also absolutely agree with him that arranging creative and constructive activities to assist rehabilitation in prisons is more difficult when wardens are stretched and there is stress as a result of overcrowding. We are certainly considering ways to ease that overcrowding. Indeed, 3,000 new prison places will come on stream over the next year.
	Having said that, I must say to the hon. Gentleman, who often takes a courageous and bold idiosyncratic stance—

Eric Forth: And wrong.

Robin Cook: One can see the amount of courage the hon. Gentleman requires by the support he gets from his Front Benchers. I shall try to give him more support than he gets from his right hon. and hon. Friends. It would help us to minimise the threat of overcrowding in prisons if we were not urged so often by Conservative Members to lock up even more people, and criticised by them when we do not do so.

John Robertson: My right hon. Friend will be aware of the job losses announced by BAE Systems earlier this week: 265 on the Clyde and 700 in Barrow. Despite the work of the unions, Scottish Enterprise, Glasgow city council, the Scottish Parliament and the elected representatives of the area, and an agreement struck last year to secure the present employment level, here we are again. Will my right hon. Friend arrange a debate on the losses and the company's conduct towards its employees?

Robin Cook: As a fellow Scottish MP, I fully understand the enormous impact that that will have on my hon. Friend's community and on the wider region. I entirely share his concern. It is indeed a matter of deep regret that a commitment made last year has not been kept by the company. He will be well aware that we will be working with the Scottish Executive to consider whether there is any way in which we can be of assistance to the local community and to those most intimately affected.

Angela Browning: Will the Leader of the House arrange either for a Home Office statement or for a substantive written explanation to be put in the House of Commons Library concerning the Prime Minister's answer yesterday to the hon. Member for Hendon (Mr. Dismore), who asked about drug crime in areas outside inner cities—the suburbs and the wider country? The Prime Minister said:
	"we are ensuring that people who need drug treatment are given it".—[Official Report, 22 January 2003; Vol. 398, c. 296.]
	I must inform the Leader of the House that the police recently told me that the waiting list for such treatment in Devon is more than 52 weeks. It would therefore enlighten the House to hear in more detail exactly what the Prime Minister meant in making that pledge yesterday.

Robin Cook: I am delighted to assure the House and clarify that this Government have greatly increased the amount of funds going into the kind of drug treatment to which the hon. Lady referred. Indeed, recalling from memory, I believe that we are increasing the total volume by 50 per cent. There is of course pressure on the provision of residential treatment in particular. We are looking at how we can widen treatment, possibly by the use of alternatives to residential treatment. However, we have provided substantial additional resources and I have no doubt that we will continue to do so.
	I was asked earlier about the business of the Northern Ireland Grand Committee. I am delighted to be able to answer my hon. Friend the Member for Thurrock (Andrew Mackinlay).

Andrew MacKinlay: I have some clout!

Robin Cook: My hon. Friend should never underestimate his clout, which is quite considerable and taken very seriously on these Benches.
	I am advised that yesterday a decision was reached to have two sittings of the Northern Ireland Grand Committee. On 4 February, it will sit at 2.30 pm to discuss the Strategic Investment and Regeneration of Sites (Northern Ireland) Order 2003, and on 6 February it will meet to discuss the Budget (Northern Ireland) Order 2003.

Pete Wishart: Can we have an early and urgent statement by the Foreign Secretary, so that he can explain to the Scottish fishing community why his Department blocked any prospect of European Union compensation, seemingly to ensure that the British EU rebate would be secured? In that statement, would he describe the benefit to Scotland of being represented by a United Kingdom delegation, which has sold out not only the Scottish fishing industry but any prospect of EU compensation?

Robin Cook: I rise wearily for the umpteenth time to try to explain to the hon. Gentleman, who represents the Scottish National party, the reality of the fishing industry: there will be no fishing industry if there are no fish.

Ken Purchase: What a surprise.

Robin Cook: My hon. Friend is surprised by that, but I find that I am repeatedly obliged to make that point from this Dispatch Box.
	It is as a result of that UK delegation that the degree of reduction was brought down from 80 per cent. to 45 per cent. Although, of course, I fully understand that the fishing community would have liked a further cut in the reduction, that would have been inconsistent with ensuring that cod stocks survive. I do not believe that that cut would have been secured by a delegation that did not have the clout of the combined United Kingdom behind it.
	On the issue of compensation, the hon. Gentleman should not deceive his own people. He knows perfectly well that the British Government and the Scottish Executive are considering ways in which they can increase support for the fishing communities. Several millions of pounds have already gone their way over the past few years in order to compensate for the pressure on the fishing industry. There will be more coming. It is important, though, that we ensure that maximum added value is provided and that we do not end up with a formula by which that added value is then reduced by the rebate.

Tony McWalter: Given that the Royal College of Surgeons has suggested that there should be one accident and emergency unit for every 500,000 people; that that is regarded as having considerable weight by strategic health authorities all over the country; that that threatens A and E facilities from Northern Ireland to the Isle of Wight, including—particularly as far as I am concerned—hospitals in Hertfordshire; and given that the Government have things called diagnostic and treatment centres, which seem to be a booby prize when one's A and E is shut, will my right hon. Friend agree to have an early debate on such units in our health service?

Robin Cook: I am not sure that a debate is required, as my hon. Friend has amply and fully made his point. There is a familiar and well-known dilemma in A and E provision—specialists in the field are clearly of the view and have some weight and evidence behind them—that the more specialised the centre, the better the chance of successful intervention. The more specialised centres will of course tend to be found in areas that have the largest populations to serve. At the same time, we must balance that with ensuring fair access to A and E facilities, which is not always consistent with locating them near very large populations. Any judgment on those two aspects is a difficult one to make. It is probably not best made at the centre but by each local health board. I very much hope that both issues will be weighed carefully in order to reach the right outcome.

Excise Diversion Fraud

John Healey: With permission, Mr. Deputy Speaker, I wish to make a statement on this week's Court of Appeal case, known as Stockade, arising from investigations into the Fort Patrick bonded warehouse in 1996–97. Stockade is linked to the London City Bond—LCB—cases, which were investigated by Customs and Excise from 1995 onwards. I wish to inform the House of the actions that the Government have taken to deal with this series of frauds when organised criminal gangs took advantage of weaknesses in the Excise regime.
	I can confirm to the House that since 1997 we have tightened Excise controls and made fundamental changes to the management of Customs cases. I can report that the independent inquiry that the Attorney-General and I jointly established in November, which anticipates the implications of LCB for cases like Stockade, is already under way. In 1998, we tightened the regulation of Excise warehouses to tackle the specific loopholes that the criminals were using in the Stockade and LCB frauds, but fraudsters and smugglers constantly change their methods, so the law enforcement challenge is continuous. In 2000, we commissioned the independent Roques review to look at Excise losses and Customs' methods of control. We accepted 62 of the 65 recommendations, and have continued to tighten the duty suspension regime since.
	For the first time ever, Customs has made comprehensive estimates of the revenue losses facing all the main indirect taxation regimes, and we now have detailed strategies with substantial new resources in place to tackle smuggling and indirect tax avoidance and fraud. Investigations in Excise cases are necessarily long and complex, reflecting the scale and sophistication of the criminal organisations involved, but the prosecutions that followed in the LCB-related cases have highlighted for Customs issues about the status of informants, the handling of documentation and disclosure of information to the courts. The Government have already put in place important changes to reduce the risk from such problems, which date from the 1990s, but of course in such complex criminal investigations there will always be some cases that fail.
	In legislation, we passed the Regulation of Investigatory Powers Act 2000 to establish a surveillance commissioner and set common guidelines on the use of informants for all law enforcement agencies. Statutory codes of practice enforced under the Criminal Procedure and Investigations Act 1996 govern the process of disclosure in criminal investigations. Far-reaching changes have also been made within Customs. A new chairman was appointed from outside the organisation in January 2000, and new senior staff on law enforcement have been appointed. With new case controls, training programmes and professional standards, the management of Customs investigations is being thoroughly overhauled.
	In addition, from April last year and following the recommendation of the Gower-Hammond report, which the Government commissioned, responsibility for prosecution decisions and accountability for Customs' prosecution function has been taken away from Customs and placed with the Attorney-General. Following the collapse of the London City Bond cases in the Court of Appeal two months ago, the Attorney-General and I jointly established the independent Butterfield review. Its terms of reference are to consider the circumstances that led to the termination of the LCB cases, examine the wider issues and advise on whether Customs' current criminal case handling meets statutory requirements and best professional practice. The review has unrestricted access to Customs staff, facilities and papers, and Mr. Justice Butterfield has been asked to report to us by June this year.
	The Government are still dealing with the fallout from events that date from the mid-1990s. We have commissioned and acted on independent reports from Roques, Butler and Gower-Hammond. We have made important changes to the way in which Customs investigations and prosecutions are handled, and the independent inquiry to deal with the concerns from this week's case is already up and running. Wherever necessary, we will do more, and the Butterfield review will play an important part in any further reform. It will be of great interest to the House, and I can confirm that a summary of the report and its recommendations will be laid before Parliament.

Stephen O'Brien: I am grateful to the Minister for his statement and his courtesy in allowing me prior sight of it.
	The statement is welcome, especially as we have been pressing for it. It stands in marked contrast to the Minister's written statement in November on the London City Bond case, to which he referred today. Why did the Government see fit to smuggle out a written statement then, but finally see fit to speak on the mess and confusion in Customs now? Is it because the Minister realises that there is now a massive dossier of damning indictments against the department? Can he confirm that the collapse of that action cost the taxpayer some £100 million in legal fees? Can he confirm press reports suggesting that up to £2 billion of revenue has now been lost in fraud following that failed sting operation, for which there is nothing to show? Did not the collapse of the LCB case cost the Customs solicitors office alone some £450,000?
	It is a disgrace that the convictions of those involved have been overturned by the prosecutors' failure to tell the court of the entrapment techniques employed. Will the Minister admit that up to 100 other convictions are in doubt? What exactly are the implications for compensation from the public purse? It is indicative of the shambles under the Government that their own Attorney-General ordered a judicial inquiry into the national investigation service only for another case to collapse while that investigation was taking place. Is it not the case that the Government have been forced to raise the minimum indicative levels of smuggling fraud following a High Court ruling against the Minister's Customs guidance in the Hoverspeed case last summer?
	Can the Minister confirm a written answer of 31 January 2002, in which his colleague, the Chief Secretary to the Treasury, the right hon. Member for Brent, South (Mr. Boateng), said that the Chancellor was not even aware of the issues resulting from the Excise diversion fraud until June 2000—three years after he came to office? Was not the subsequent Roques report supposed to have ended the problems, and why has it failed? Can the Economic Secretary to the Treasury confirm that the Attorney-General was sent a monthly schedule of sensitive cases, including a number involving LCB, on 14 March 2001? Subsequently, has not the Customs solicitors office kept the Attorney-General abreast of developments? If it has, why has the chaos been allowed to escalate?
	Does today's statement that an independent inquiry is already under way into this week's events mean that the Minister has consulted the Attorney-General about extending the existing Butterfield inquiry? Is that not needed in the interests of taxpayers and public services on which revenues rely? How far-reaching will Lord Butterfield's inquiry be? Does his remit include investigation of the appropriateness of powers of prosecution? Will there be a further oral statement on the Floor of the House when the inquiry reports?
	Ultimately, despite the Minister's weasel words about the mid-1990s, the real truth is that the decision to prosecute was made under the present Government. The decision to spend millions of pounds of taxpayers' money on the case and the decision not to disclose participating informants were taken under them. The collapse of potentially successful major sting action was caused by decisions taken under them. Instead of tax fraudsters, taxpayers have been stung by the Government's action. Is that not why, in a vain attempt to cover their embarrassment, all the members of the Treasury Front Bench, excluding the Chief Secretary, have had to turn out for the statement, outnumbering their own Back Benchers?
	The Economic Secretary must now turn his statement into action to reassure Parliament and the public that his guidance to Customs officers and his control over the department is tenable. Was not the Chancellor's aim in paragraph B56 on page 200 of the pre-Budget report, as recorded in a Customs and Excise press release on protecting indirect tax revenues on 27 November last year, to
	"reduce the proportion of VAT which goes uncollected and produce more than £2 billion per year in additional VAT revenues by 2005–06"?
	Is that strategy for Customs not seriously in doubt given the departmental chaos under the present chancellorship, and does that not blow another hole in the Chancellor's already downgraded forecasts for public revenue, public borrowing and the public deficit?
	Is it not plain that since the Government came to office in 1997, Customs and Excise, Britain's oldest revenue-raising body, with a proud history of dedicated professionalism, has been reduced to a chaotic mess? It faces judicial inquiry and police investigation. Its actions have been ruled illegal by the High Court and it is losing more of the theoretical yield of VAT through avoidance and fraud than when Labour came to office. Is the latest loss of taxpayers' money not another damning example of Customs in chaos?

Mr. Deputy Speaker: Order. Before the Minister responds, perhaps I may say to the House that it contravenes the sub judice rule for hon. Members to refer to any case individually in any detail.

John Healey: The hon. Member for Eddisbury (Mr. O'Brien) started by accusing me of smuggling out the statement to Parliament when the Attorney-General and I launched the Butterfield review in November, in immediate response to the collapse of the LCB case. We acted immediately; we informed Parliament immediately; we did so under the procedures established by the House for written statements. Let me remind the hon. Gentleman that the problems with which we are dealing now date to the mid-1990s—frauds that were going on at that time, and investigations that were started and largely conducted then.
	The hon. Gentleman accuses Customs in the broadest terms off the back of one case. [Interruption.] "Customs in chaos" was the phrase that he used. He needs to understand that modern criminal trials are as much about the process of the trial as about the guilt of the defendants. It is entirely wrong to condemn the entire Customs service as he did. In none of the cases that has been halted so far is there any evidence of wider criminal conspiracy or corruption within Customs. The Roques report that we commissioned in 2000 looked into the matter and reached the same conclusion. Butler examined it and said the same.
	Perhaps the hon. Gentleman should take some advice from his right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), who is not on the Front Bench. He well understood, back in 1995 when he was Home Secretary, the problems of condemning an entire service off the back of single cases. He stated, in response to my hon. Friend the Member for Sunderland, South (Mr. Mullin):
	"I do not think that it is at all appropriate to infer from particular cases, however serious, generalised allegations about a propensity on the part of the police to behave in the way that the hon. Gentleman has imputed to them."—[Official Report, 16 May 1995; Vol. 260, c. 170.]
	I suggest that the hon. Member for Eddisbury do his own research, instead of using The Daily Telegraph leader writers to do it for him. Their reports this week of £2 billion duty loss are entirely inaccurate. The hon. Gentleman asked for the figures. The duty loss in the LCB case was £340 million. The duty loss in the Stockade case was £89 million. [Interruption.] It certainly is not all right, but I remind the hon. Gentleman that the fraud was perpetrated in the mid-1990s. It was going on under the previous Government.
	The hon. Gentleman also asked me for detailed figures arising from the potential LCB-related cases and the fallout from them. Eight cases have collapsed so far. We are currently reviewing 20 further cases to judge the safety of the convictions. Thirty-two convictions have been overturned so far and no evidence has been offered against a further 15. Potentially, 93 convictions are susceptible if all the cases that we are currently reviewing are found to be unsafe.
	The hon. Gentleman raised the point about sensitive cases. The Attorney-General, Customs Ministers and every law enforcement Minister will review sensitive cases. Listing and monitoring them is part of the effective management of the investigation and prosecution procedures—precisely the processes that were not in place in the mid-1990s, which led to many of the problems with which we are now dealing, following the collapse of the cases.
	Finally, I confirm—the hon. Gentleman seems to be in some doubt, even though I made it clear in my statement—that Butterfield will consider the issues at stake in the Stockade case. We set him the deadline of June to report jointly to the Attorney-General and me. A summary of the report and its recommendations will be laid before the House.

Matthew Taylor: Hon. Members on both Front Benches have reason to be embarrassed about the matter, which dates back to 1995. The Minister's statement was complacent in its reference, for example, to the fact that in complex criminal investigations there will always be some cases that fail. This is not simply a failure of a complex investigation because of the complexities of the case. We all understand that that will happen from time to time. This goes to the heart of the operation and the way in which Customs and Excise embarked on it.
	It is ludicrous of the Minister to say that generalised criticisms of Customs and Excise should not be derived from the case, given that those in charge of the department have been changed, the departments' procedures have been changed, and substantive powers have been removed from the department as a result of these cases.
	When, as in the present case, Customs and Excise commit to lawbreaking as part of an operation, as a means of trapping suspects, who gives authority for the law to be broken? Does it reach Ministers' desks? In the London City Bond case, the matter commenced in 1994 under the previous Administration, and continued until 1998 under the present Administration. Was ministerial authority sought for the operation, and if it was, who gave it? Was the then Minister made aware of the contingent liabilities through loss of revenue, which in fact occurred on a massive scale?
	There have been a number of inquiries into the matter. Has the Minister ensured that the reports are all in the House of Commons Library so that they can be examined? Why will the Butterfield report not be published in full?
	Most important of all, since it is the aspect of greatest concern to the taxpayer, is the question of costs. What is the Minister's estimate of the full potential cost if the Government drop the other cases now subject to appeal? At what stage were Ministers consulted on the liabilities when the decisions were taken to continue with those cases, long after—it seems—the Government were aware of the potential for failure of those cases? Is it not time to separate entirely the investigation and prosecution procedures? The Minister noted that some steps have been taken, but there has not yet been a total separation.
	Much bigger costs arise from the loss of revenue. Can the Minister explain the apparent discrepancy between the figures provided by Customs and Excise—in the National Audit Office report, the National Investigation Service put the figure at £579 million in total—and by Ms Jan Wanstall, a senior Customs and Excise official, who was one of those who brought the failings of the case to the attention of the Government and others? Her evidence to the court stated that the losses to the Revenue from that fraud were £1.25 billion—a figure that no one disputed. In her testimony in court, she alleged that that was a matter of the right politics. Will the Minister please explain the difference between those figures?

John Healey: The hon. Gentleman criticises the record of the Opposition and of the Government. I suppose he does so because he has no record of his own in government on which to comment. He accuses me of complacency in the matter. I utterly reject that, after everything that we have done to set up the Butterfield review and to make sure that it gets to the bottom of the lessons that are there to be learned in the LCB-related cases.
	More importantly, of course it is right that we try to learn the lessons of what went wrong in the LCB cases, but what interests me more, and what I want to know as the Customs Minister responsible, is whether the steps taken by Customs in respect of investigation and prosecution are good enough. Do they meet the statutory requirements that we now have in place, which were not in place in 1995? Do they meet the best professional standards that are now in place and which may not have been in place in the mid-1990s? In particular, can we improve on what is currently being done?
	On the hon. Gentleman's next point, no entrapment was involved in the cases. Using informants while allowing fraud to run, as it were, is an accepted, established and common part of law investigation and enforcement, but a question arises about the balance between allowing a fraud to run in order to pursue the investigation and nail those involved, and the scale of the loss of revenue to the Exchequer. It is the judgments that were made in 1995 and 1996 that were perhaps at fault in that regard. In the court cases that have folded at the moment, none of the techniques used in investigation has been questioned or criticised. It is the disclosure about those techniques that has led to the legal problems and therefore the unsafety of the prosecutions.
	On the regime to oversee those issues, regulations are in place on the use of informants and statutory systems are in place on standards of disclosure. Of course, I was not involved in the decisions. It is wrong of the hon. Gentleman to suggest that a Customs Minister should be involved in operational decisions. Indeed, his doing so betrays a failure to understand the nature of law enforcement and the difficulty of such decisions.
	The hon. Gentleman asked me a couple of other specific questions. To date, the legal cost in the LCB case is £7.4 million and in the Stockade case it is £760,000. He asked me about prosecution decisions and the handling of the cases—a matter that I explained in my statement. Perhaps he did not read the advance copy or listen carefully enough. From April last year, as the Gower-Hammond report, which we commissioned, recommended, we have separated from Customs responsibility for making decisions about prosecution and accounting for the conduct of the prosecutions function and given it to the Attorney-General. Thus it is properly placed in the hands of one of the Government's Law Officers.

Several hon. Members: rose—

Madam Deputy Speaker: Order. I make a plea for brevity, so as to allow as many hon. Members as possible to be called. Of course, I also have the main business to protect.

Nigel Beard: May I congratulate the Government on the statement and on the steps that have been taken over some years to remedy the record of grossly inadequate direction and management in Customs and Excise, which stretched back way before 1997, when this Government took office?
	What is being done to remedy the position whereby cigarettes are being exported duty free to Andorra and smuggled back to this country? Is that one of the cases that will be reviewed?

John Healey: I accept my hon. Friend's criticism, as I know will Customs, about previous management problems. The strengthening of the board of commissioners, the appointment of a new chief executive on the law enforcement side and a raft of new staff have all helped to reinforce the capacity of Customs to deal with things in a better way.
	On the serious problem of tobacco smuggling, my hon. Friend will be aware that the Public Accounts Committee recently conducted an inquiry and published a report. He will therefore know that Customs is working with each of the major UK tobacco manufacturers on detailed information about production, markets and exports. That will be encapsulated in what we call a memorandum of understanding, which represents a determination to disclose information and co-operate with Customs to stamp out widespread tobacco smuggling. He will be aware that one of the major companies, Imperial Tobacco, is now working more closely with Customs. We have not yet reached a point at which we feel that we can sign that memorandum of understanding, but I can tell him that the signs are at least encouraging.

John Bercow: I am a great admirer of the Economic Secretary, as he knows, but he really must answer directly the very pertinent inquiry posed to him by my hon. Friend the Member for Eddisbury (Mr. O'Brien). What is the expected impact of the collapse of these cases on the Treasury forecast of an additional £2 billion in revenues by 2005–06 from anti-VAT fraud measures? That forecast was made by the Government at paragraph B56 of page 200 of the pre-Budget report only a few months ago.

John Healey: The figures to which the hon. Gentleman refers are the projected revenue gains that we will achieve from the new anti-VAT fraud strategy that we have put in place—a result, in part, of the additional resources that we are putting into Customs. Those figures were audited, discussed and developed with the National Audit Office. As the publication to which he referred suggests, they take their part in the projection of public finances for the future.

Nick Hawkins: These are very serious matters, as the Minister knows. Will he confirm that the Butterfield inquiry will take into account all the views of all the counsel involved in the cases that have collapsed? As one of the two shadow Law Officers in the House, I have had discussions with one of the counsel and I think that that would be very helpful.
	Will the Minister assist in arranging for his noble Friend the Attorney-General to meet me and my hon. Friend the Member for Stone (Mr. Cash) to discuss the implications of these collapsed cases? Will he concede today that whatever the date when the fraud started, all the relevant decisions that have led to the cases' collapse have been taken since this Government came to power? The decision to prosecute, all the decisions about how the evidence was to be presented and, most crucially and culpably, the decision not fully to disclose the role of prosecution witnesses to the defence have led to the collapse of the cases. Will he now confirm that he recognises that all those Customs and management decisions were fatally flawed and that that is what is costing huge amounts of taxpayers' money and will carry on costing more when compensation claims are taken into account for these and future collapsed cases arising from this shambles?

John Healey: There will always be problems with individual cases, no matter how good the systems and the decisions that are taken, when the complexity of the criminal investigations and prosecutions is such as it was in the series of cases in question. The Butterfield inquiry is an independent inquiry conducted by an esteemed and highly regarded High Court judge. It is proper that it is independent, so the judge will make decisions about how he conducts it. On the basis of the enormous amounts of material relating to the cases that we have already forwarded to the judge, it is clear that he is taking extremely seriously the need to get to the bottom of exactly what went on in the LCB-related cases.
	I shall pass on to the Attorney-General the hon. Gentleman's request for a discussion on some of these matters.

Michael Jabez Foster: May I congratulate my hon. Friend on the efforts that he has made to get to grips with this problem? May I also encourage him not to take the soft-touch and let-them-off-the-hook attitude of Opposition Members when people commit such offences and there is reasonable evidence to prosecute?

John Healey: My hon. Friend is absolutely right that a tough prosecutions policy is an important part of the armoury that any law enforcement agency, including Customs, has for dealing with organised, systematic and often international criminal fraud gangs.

Adam Price: I am grateful for having had advance sight of the statement. On the collapse of an earlier case, Mr. Justice Foley accused the national investigation service of Her Majesty's Customs of having a culture of recklessness—his words, not mine—and referred to a catalogue of illegalities. Will the Minister explain why Customs and Excise should not be brought into line with the police and stripped of control of its own prosecutions? Will he confirm whether any members of the national investigation service are currently suspended pending criminal investigations?

John Healey: I am glad that the hon. Gentleman received a copy of the statement. The courts made no suggestion of systematic corruption or criminality by Customs in any of the cases that the statement covers. I have dealt with control of the prosecution several times already. From April last year, the responsibility for the prosecution and accountability are matters for the Attorney-General, not Customs. That is proper.

Peter Kilfoyle: Although I am a great admirer of the work of rank and file Customs officers, who have a difficult job, will the Economic Secretary assure us that we shall have full disclosure of all the details of the corruption and ineptitude that characterised the Charrington and Haase-Bennett cases, especially the use of criminal informers? Hitherto, senior management of Customs and Excise has been marred by evasion and obfuscation about information that should be in the public domain. Will my hon. Friend guarantee that that will be replaced by a policy of openness and transparency?

John Healey: I am certain that Customs and Excise has never previously published more information about its activities, estimates and analysis of the fraud and smuggling that confronts us. It has never published more about its work and the way in which it makes decisions.
	My hon. Friend mentioned the use of informants in two cases. This afternoon, I am dealing with matters that are connected with the LCB case. The use of informants, and disclosure of information about that, is central to questions about the safety of the cases and the convictions. They will also be central to the Butterfield review and inquiry.

Jonathan Djanogly: In January 2002, I posed seven written questions to the Chancellor on the activities of Customs and Excise on the London City Bond fraud trial. Indeed, one was mentioned earlier. Although the Chief Secretary's answers were opaque to say the least and no action ensued, they revealed a murky trail of Customs and Excise not informing Ministers about what was going on, hundreds of millions of lost pounds—owing to criminals being allowed to pursue fraud on the basis that it might lead to catching larger fry—and failed prosecutions.
	The Economic Secretary said that we should not base conclusions on one trial. We are not doing that. How many investigations have taken place? I believe that the figure is almost 200. If so, how can he claim that he is about to launch his investigation? Why has not that happened previously? Why has the problem been allowed to continue for so long? Why has a full investigation by the Government not taken place to date?

John Healey: The independent report that we commissioned from Roques in 2000 considered some of those questions and problems; the independent review that we commissioned from Butler also did that. The hon. Gentleman is right to draw attention to the scale of the revenue loss that was caused to the country when the frauds were perpetrated. I have already told hon. Members that in the LCB case alone, there was a loss of £340 million. The Roques report covered that period and calculated that the total Excise loss from fraudulent activities was almost £700 million. I remind the hon. Gentleman that that happened when the previous Government were in charge.

Jonathan Djanogly: That is not acceptable.

John Healey: The hon. Member for Eddisbury asked me about revenue loss and I gave him the figures. I remind hon. Members that the problems that we are tackling and the cases that flow from them stem from the mid-1990s and the previous Government.

Richard Bacon: When I asked the chairman of Customs and Excise last year how many members of his organisation were subject to criminal prosecutions, before the Public Accounts Committee, he answered, "Seven", although he subsequently corrected that to 17 when I tabled a question to the Chancellor of the Exchequer. The Economic Secretary referred to several reports, including the Butterfield inquiry, the Butler report and Roques report, which I am holding. I have read it carefully. He knows that they contain nothing about heroin sting operations in Pakistan. Is not it suggestive that so many inquiries are taking place? Does the Economic Secretary agree that the time may have come for a thorough inquiry into all aspects of the management and operation of Customs and Excise, excluding nothing? It should include the quality of the legal advice available to Customs and Excise—that appears at least suspect—the use and management of sting operations, of bonded warehouses and the Queen's warehouses, of debt management and of heroin trafficking and the criminal involvement of Customs officers.

John Healey: The Roques report contains nothing about heroin in Afghanistan because it was designed to review and deal principally with the problems in the Excise regime and the operation of bonded warehouses. The hon. Gentleman points out the wide range of Customs' responsibilities.

Richard Bacon: Have a review.

John Healey: I reject the idea that it would be useful to conduct a broad review that encompasses the full range of responsibilities.

Norman Lamb: The Economic Secretary made it clear that Ministers did not authorise the means whereby Customs and Excise conducted the investigations. However, were Ministers kept informed? If so, who was informed? He did not clearly answer the questions that my hon. Friend the Member for Truro and St. Austell (Matthew Taylor) asked, when he highlighted the discrepancy between the loss to the Revenue of £1.25 billion in the London City Bond case and the amount of £575 million to which NIS referred. That is a massive difference. What is the reason for it? Are police currently investigating any individual Customs officers in relation to fraud?

John Healey: It simply is not for Ministers to authorise the use of specific techniques or methods of investigation. That is an operational matter. The settlement of responsibilities between Customs and the Minister responsible for Customs means that there is no reason for the relevant Minister to be briefed continuously about the detail of operational cases.
	On the figures that the hon. Gentleman cites, I reported to hon. Members that, in the LCB case, £340 million was lost to the Revenue in Excise duty when the frauds were run.

Points of Order

Alan Simpson: On a point of order, Madam Deputy Speaker. I wonder whether you are willing to consider an abuse of hon. Members' rights. Under the experimental modernisation arrangements for the House, hon. Members were assured that our rights of access to the parliamentary estate and those of the public would be protected. On Tuesday, an enormous anti-war lobby took place outside Parliament, in Central Lobby and in meetings in the House.
	Two events caused me great concern. First, members of the public who sought access to Central Lobby had any anti-war literature removed from them, including copies of that day's Daily Mirror, which happened to carry a "No War" slogan on the front page.
	Secondly, after getting members of the public into the Grand Committee Room for the meeting that we had booked in the evening, Members of Parliament were told at 9 pm that we had to stop because the staff had to go home. Can we consider the precise arrangements so that opportunities for public and democratic debate are not removed entirely even when formal sittings have been completed?

Nick Hawkins: Further to that point of order, Madam Deputy Speaker. I want to make a separate but related point about the effect of the new arrangements. I voted against them because I was especially worried that many hon. Members would be required to be in two places at once. Will you discuss with Mr. Speaker and, if necessary, the Chairmen's Panel, the great difficulty for Front Benchers, like me, and Back Benchers of all parties when they have to be in a Standing Committee Upstairs, conducting the line by line, word by word, clause by clause scrutiny of measures, and in the Chamber? Those Committees clash more than ever before with the business in the Chamber. Under the new arrangements, we are also finding that it is difficult for organisations lobbying us on any issue to meet us for a working lunch—these were particularly helpful before—because now, particularly on a Wednesday, we have important matters such as Prime Minister's questions taking place over lunchtime. It is important, Madam Deputy Speaker, that you pass on to Mr. Speaker and to the Chairmen's Panel how very much more difficult these new hours are making it for us to do the job that our constituents expect us to do.

Madam Deputy Speaker: I shall deal first with the point of order raised by the hon. Member for Nottingham, South (Alan Simpson). I shall certainly draw his comments to the attention of the Speaker, the relevant Committees and Officers of the House. I understand his concern about this matter. On the point of order raised by the hon. Member for Surrey Heath (Mr. Hawkins), his comments will have been heard, but I shall certainly draw them to the attention of the Speaker.

Patrick McLoughlin: On a point of order, Madam Deputy Speaker. We are about to start the debate on the Regional Assemblies (Preparations) Bill. As my right hon. Friend the shadow Leader of the House pointed out during business questions, we shall be considering seven new clauses and a number of Government amendments. Mr. Speaker has selected seven groups of amendments to be discussed. We are about to enter into a debate that will be timetabled to three hours. That gives us three hours for the consideration of what anybody would regard as a major Bill. Mr. Speaker has powers under the affirmative resolution procedure not to put the question if he feels that there has been insufficient debate. I realise that that power does not fall to the Chair under the procedures that we are using today. It is most unsatisfactory that so little time should be available for the debate on a very important Government Bill.

Madam Deputy Speaker: The hon. Gentleman is quite right to say that the power applies only to the negative resolution procedure. The House is currently operating under the programme motion that has already been agreed to, and the motion which we are about to debate.

Andrew Turner: Further to the point of order made by my hon. Friend the Member for Surrey Heath (Mr. Hawkins), Madam Deputy Speaker. Will you draw to the attention of the authorities responsible for such matters the difficulties that our constituents are having in coming to this place and taking advantage of the line of route arrangements, particularly on Tuesdays and Wednesdays—the days on which the great change has happened since last year? Our constituents have to be at the Victoria Tower entrance by 9.30 am—

Madam Deputy Speaker: Order. May I say to the hon. Gentleman that this matter has been agreed by the House? He may find it inconvenient, as may some of his and other Members' constituents, but it was agreed by the House. No doubt, his comments will none the less be noted.

Orders of the Day

Regional Assemblies (Preparations) Bill (Programme) (No. 3)

Nick Raynsford: I beg to move,
	That, having regard to the Resolution of Standing Committee A, reported on 19th December 2002, the programme order of 26th November 2002 in relation to the Regional Assemblies (Preparations) Bill be confirmed.
	As hon. Members know, the Regional Assemblies (Preparations) Bill has recently received detailed scrutiny in Committee, following its Second Reading in the House in November last year. There were nine sittings of the Standing Committee, as well as one day on the Floor of the House when we considered clauses 1 to 4. I am grateful to all those hon. Members who participated in the consideration of the Bill for their constructive contributions.
	The Opposition have made a great deal of fuss about the timetabling of the Bill, and a lot of synthetic indignation has been expressed. Such was the provision of time in Committee that it was possible for the Opposition to spend an inordinate amount of the debates arguing about whether sentences should begin with the word "but". Members should be aware of that when they hear the Opposition making further protests about there being insufficient time to consider the substance of the Bill.
	The programme motion in the name of the Deputy Prime Minister and the Leader of the House provides that the debate on the amendments and new clauses should be concluded one hour before the moment of interruption, and that Third Reading should be concluded at the moment of interruption at 6 o'clock. This has been agreed through the usual channels and should provide sufficient time to debate the 20 amendments and seven new clauses that have been selected. More than one third of the amendments to be debated have been tabled by the Government, mostly in response to concerns raised in Committee, and I hope that these will generally be welcomed. The Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Shipley (Mr. Leslie) and I look forward to an interesting debate.

Philip Hammond: I am disappointed with the Minister's opening remarks. My understanding is that nothing has been agreed through the usual channels. The timetable that we face today has been imposed on us by the Government. The Minister referred to the time available for the scrutiny of this very important Bill in Committee. I think he was being slightly disingenuous, because I stated quite explicitly during an earlier stage of the Bill that I recognised that the time allowed for consideration of the Bill in Committee was probably adequate, and that the problem was that the four key clauses underlying the principles of the Bill that were debated on the Floor of the House had been given a grossly inadequate amount of time. In fact, the House did not manage to debate all those issues.
	The issue before us today is that we have a little under three hours left in which to consider a Bill of constitutional significance. That significance has already been recognised by the fact that part of the Committee stage of the Bill was taken as a Committee of the whole House. I would suggest to the Minister that in future the Government show a certain amount of self-restraint. When we have only a short period of time available for Report and Third Reading, the Government must resist the temptation to allow a second Government statement before that business begins. I hope that the Minister will agree with me on this, as he is not shy of debate and is generally keen to engage with important issues such as those that we are discussing today. Although I do not expect him to say anything publicly, I hope that he will privately make his views known to the Leader of the House, because a lot of his hard work preparing for the later groups of amendments—which will probably not be considered this afternoon—will have been wasted, as will the hard work of many Conservative Members, myself included.
	The new clauses and amendments that have been selected give wide scope for debate on some of the fundamental issues that have troubled Conservative Members—and, indeed, some Labour Members—during the earlier stages of the Bill. So this is a good selection of amendments, and it will provide a good opportunity to debate the issues that have caused some difficulty. I am only sorry that we shall not get through all those groups this afternoon. As my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) said in his point of order, seven groups have been selected for consideration. Frankly, it is inconceivable that we shall get to the last of them.
	There seems to be a serious flaw in our arrangements and procedures. On Report, new clauses are quite properly considered first, but on this occasion, all the new clauses have been tabled either by the Opposition, the Liberal Democrats or Back-Bench Members. Although I live in hope, I try to be a realist, and it is likely that the Government will resist all those new clauses. It is therefore likely that they will not be added to the Bill. I remain an optimist, but it is also likely that all the Government amendments will be made. They will be voted on, and the Government will use their majority to carry them, but they will not be debated because they appear towards the end of the selection list for today. It will necessarily almost always be the case that the items on the amendment paper that are certain to make it into the Bill will be those least likely to receive proper debate and scrutiny on Report. So the Government get their amendments without any debate or scrutiny, which effectively places the burden of scrutiny on the other place.

John Bercow: Does my hon. Friend agree that it was presumptuous in the extreme for the Minister to imply that, because Government amendments on Report are principally responses to representations made by members of the Standing Committee, this should be an-open-and-shut case? Is it not possible that Members present today who were not so privileged—I was not so privileged—as to serve on the Committee might wish to contribute to constructive deliberation on the amendments?

Philip Hammond: My hon. Friend is absolutely right, but it is not true that all the Government amendments are responses to points raised by Opposition Members in Committee—although it is true that at least one group is a direct response to the Minister's resistance of a point raised by them then. Not the least of my disappointment when I learnt that we would probably not reach that group today was due to the fact that the Minister would have no opportunity to proffer his thanks to the Opposition for drawing attention to the issues involved.

Nick Raynsford: I hope the hon. Gentleman will acknowledge that Government amendments Nos. 8, 9, 10 and 11—which are indeed at the end of the list and therefore may not be reached if he and his colleagues speak at length; I hope they will not do so—are a direct response to an amendment that he tabled in Committee. I said then that I would table amendments to meet his objective, and I hope he will accept these amendments as an expression of my appreciation and thanks for his efforts.

Philip Hammond: I am glad we have managed to get that out of the way. But I think it disingenuous of the Minister to suggest that a debate on seven groups of new clauses and amendments—one important group, the second, contains four new clauses—can be completed in the time available, which is less than two hours and 45 minutes. That is clearly not the case. This has nothing to do with delaying or other tactics on the part of any Members on either side of the House; it is simply a reflection of the inadequate provision of time.
	Let me respond to the intervention of my hon. Friend the Member for Buckingham (Mr. Bercow) by saying that at least one Government amendment and subsequent Opposition amendments to it are in response to representations received by the Government from the Electoral Commission. Given that the commission is an innovative body, I think that Members would be interested in exploring the process whereby the Government have published a Bill, the commission has made representations to the Government, and the Government—to give them their due—have responded. That too is an innovative process in our constitutional arrangements, involving a new body, which bears scrutiny and questioning. Sadly, it will be subject to neither.
	As I was saying before the Minister intervened, it is ironic that changes in our procedural rules designed to make this place more modern and efficient have cast the burden of scrutiny on to the other place—the unreformed other place—which must now do the work that most of our constituents think they have sent us here to do: the work of scrutinising legislation properly before it is enacted.
	I shall end shortly, because another irony is that the longer we discuss the inadequate allocation of time the more time we use up. Let me say to my colleagues, however, that the second group of amendments and new clauses will allow debate on what I believe to be key issues. I hope that we reach later groups, and I certainly hope that the debate on the first group is reasonably brief so that we can reach the vital second group, although I do not hold out much hope of our getting much further than that.
	It is conceivable that, on some occasions, timetables can work, but if they are to work they must be fair and reasonable. Timetables such as this, providing less than three hours for consideration of a constitutionally significant Bill, bring any timetabling system into disrepute. To the Government's shame, an important constitutional Bill will yet again go through this place on the nod, and another nail will have been hammered into the coffin of our parliamentary democracy.

Edward Davey: I shall not take 10 minutes to oppose the motion. I shall make two points.
	The Minister is right that the Conservative spokesmen spent a long time debating whether the word "but" should begin a certain part of the Bill, thus wasting a fair amount of the time available, but he was wrong to propose the motion in this way. The two statements have taken up time, and according to our modernised procedures the business of the House ends at 6 pm. That has truncated the time available for this important Bill, which we deeply regret. We cannot therefore support the motion.

Gary Streeter: I had not intended to speak, but I was so incensed by the Minister's speech that I felt that I must make some response.
	I entirely rebut the claim by the hon. Member for Kingston and Surbiton (Mr. Davey) that time was wasted in Committee. Unlike my hon. Friend the Member for Buckingham (Mr. Bercow), I had the privilege of serving on the Committee, and thoroughly enjoyed it. I felt that the Committee's proceedings were measured and focused, and raised important issues.
	As for the alleged killer point that some time was spent in discussing whether the word "but" should feature, does the Minister recall the hon. Member for Manchester, Blackley (Mr. Stringer)—who is sitting behind him—making a point that some of us were making? He said that court cases could take weeks and months, and that tens of thousands of pounds could be spent on deciding the meaning of the word "and" or the word "but" in a statute. It is actually quite important to ensure that legislation is accurate, and a "but" or an "and" in the wrong place can make a big difference.

Desmond Swayne: Might that not be why so much time was spent discussing the word "but"?

Gary Streeter: I agree. I certainly think that there has been no time wasting or filibustering.

Philip Hammond: Is not the Minister's point disingenuous? I acknowledge that the Committee did not use all the time available to it. We did not take advantage of the opportunity for a 10th sitting, because we had been able to complete the part of the business that was due to be dealt with in Standing Committee. The problem related to the part that was to be taken on the Floor of the House.

Gary Streeter: My hon. Friend is right. I was about to make the same point. I thought that the Committee proceedings were measured, sensible and focused; but there was not enough time for debate on the issues that had to be dealt with by a Committee of the whole House. I had prepared two speeches that could not be delivered. I feel that the country has been cheated of a significant amount of wisdom.

Jim Knight: Is there not something bizarre about our wasting time on this debate when we could be debating the Bill, and talking about the word "but" yet again?

Gary Streeter: The hon. Gentleman is quite wrong.

Eric Forth: On a point of order, Madam Deputy Speaker. Surely you can confirm that if there was ever any question of time being wasted you would be the first to point that out to the House, and return it to order.

Madam Deputy Speaker: The hon. Gentleman is right, but I also ensure that Members have the opportunity to put their points of view. When it comes to wasting time, I will certainly make the necessary decision.

Gary Streeter: The hon. Member for South Dorset (Jim Knight) was entirely wrong. As I said at the outset, I did not intend to speak in this debate, and I realise that my speech is eating into time that could be spent on the amendments; but sometimes a point of principle must be put on record. I feel that I am well placed to make this point, for, unlike some of my colleagues, I do not oppose timetabling in principle—

Eric Forth: Shame!

Gary Streeter: My right hon. Friend disagrees with me. I understand that: I disagree with him. I think that a Government are entitled to their business. I remember from my days in the Whips Office under that great, successful Government of 1992 to 1997 that there were times when the Whips tried to find speakers for debates on the Floor of the House. I felt that that was wrong then and I feel that it is wrong today. I am not against timetabling in principle but there is surely an implied contract which says that a timetable motion that is laid before the House should give sufficient time for hon. Members on both sides of the House—Back Benchers and Front Benchers alike—to discuss in detail the legislation that is before us. The length of time involved will be determined by the weight and substance of the legislation being considered. In this case, we are talking about a constitutional matter that is so important that we had to discuss the first two clauses on the Floor of the House, yet today we have three hours to deal with seven groups of amendments. Not only is it an important matter, as we heard in Committee and when the Bill was discussed on the Floor of the House, but there are profound reservations about the legislation on both sides of the House, including among Labour Members. That is why it is important that these matters get a fair hearing.
	At the moment we are rightly discussing the future of the other place and House of Lords reform. It is my strong belief that we have not yet gone far enough in reforming this House but the key issue on which this House fails time and again is proper scrutiny of legislation. One of the key—

Madam Deputy Speaker: Order. I remind the hon. Gentleman that the programme motion refers to a particular piece of legislation. Perhaps he could address his remarks to that programme motion.

Gary Streeter: I was getting carried away with my own incredible eloquence, Madam Deputy Speaker. I apologise.
	We need time to study every piece of legislation—in particular this Bill, which deals with weighty constitutional matters on which hon. Members on both sides of the House have profound disagreements. My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) made the point during business questions that there should be protected time for legislation. I strongly agree. I ask the Minister to take that back to his colleagues. What has happened this afternoon is totally unacceptable and unnecessary, and the Government need to think again.

John Bercow: I am unhappy on two counts. First, I am unhappy about some of the remarks made by the Minister and the hon. Member for Kingston and Surbiton (Mr. Davey) about the debate that has already taken place in Committee. Secondly, I am unhappy about the very fact of the tabling of the programme motion. I shall deal first with the first point.
	I take the gravest possible exception to the casual and gratuitous abuse that has been showered by the Minister and the hon. Member for Kingston and Surbiton on three serious, committed and diligent parliamentarians, my hon. Friends the Members for South-West Devon (Mr. Streeter), for Runnymede and Weybridge (Mr. Hammond) and for New Forest, West (Mr. Swayne). In performance of their parliamentary duties on behalf of their constituents, they have sought in Committee and elsewhere properly and in detail to consider the legitimate policy proposals that have been unveiled by the Government. To suggest that three such serious and earnest Members would be guilty of evasion, procrastination or attempted filibustering is not only untrue but unworthy of the right hon. and hon. Members concerned. These are serious issues and they need to be debated.
	Secondly, I am unhappy—I make no apology for the fact—about the tabling of the programme motion. In fulfilment of our responsibilities to our constituents, it is extremely important that we in this place are not inward-looking—that we do not gaze at our own navels—and that we provide a proper context for the consideration of our business, including programme motions.
	I know that we do not refer to people in this place other than Members of Parliament but we are aware that, even though there is diminishing public interest in politics, and growing and pervasive cynicism about politics and politicians—

Madam Deputy Speaker: Order. Perhaps I should remind the hon. Gentleman that the motion under discussion is the programme motion to the Regional Assemblies (Preparations) Bill. Perhaps he would address his remarks to that motion.

John Bercow: I was turning to precisely that point. I am grateful to you, Madam Deputy Speaker, for getting me to do so.

Matthew Green: On a point of order, Madam Deputy Speaker. In six minutes' time, the first ever youth question session will take place in Westminster Hall. If Conservative Members force a vote by speaking for so long, they will disrupt the first ever youth question session. Can we have a ruling on that?

Madam Deputy Speaker: Important though that may be, it is not a matter for the Chair.

John Bercow: I am grateful to you for your protection, Madam Deputy Speaker. Even by long-established Liberal Democrats standards, that intervention was particularly asinine.
	On the subject of the programme motion to which you rightly direct me, Madam Deputy Speaker, let us provide the context for members of the public listening to our proceedings and observing them to make a judgment on whether it is the Government or the Opposition Members objecting who are right on this important matter. Let us be clear what we have in mind. In this context, I go back to what was stated from the Opposition Front Bench, if the hon. Member for Kingston and Surbiton feels able readily to contain himself for a limited period to allow proper attention to be paid to the important debate that needs to take place.

George Howarth: Will the hon. Gentleman give way?

John Bercow: I will not give way to the hon. Gentleman at the moment.
	I want to address the point that was rightly raised by my hon. Friend the Member for Runnymede and Weybridge. He referred to the number of amendments and new clauses that we have to consider. The point that I want to put on record is this. The Government want us to consider between now and 6 o'clock proposed new clauses and amendments to crucial legislation, the Regional Assemblies (Preparations) Bill—I do not think we would disagree about that—on the subjects of provision for further referendums; the preconditions for holding referendums and definition of regions; the local government review; the commencement of the legislation; referendum questions and statement; order for combination of polls; and directions to the Electoral Commission. None of those matters is trivial. All are important.

Andrew Turner: Does my hon. Friend agree that he should emphasise in that list the regional boundaries, to which hon. Members on both sides of the House may wish to refer?

Madam Deputy Speaker: Order. We are not discussing individual clauses or amendments but the programme motion.

John Bercow: I am grateful to you, Madam Deputy Speaker, but the significance of the argument lies in the importance and the number of the proposals that the Government are putting to the House. As you can readily testify, I am being customarily fair-minded about it. I could be extremely hostile to the Bill. No doubt I would be if I had been on the Committee or were going to take part in detailed debate on every aspect of it, but I am making the point that the proposals before us are important. The Government have a mandate, and it is entirely legitimate for them to put forward these proposals.

John Pugh: Will the hon. Gentleman give way?

John Bercow: I will in a moment if the hon. Gentleman will contain himself for a few moments.
	What is not legitimate is for the Minister, suffused with the importance of his proposals and with a righteous indignation welling up in him at anyone's daring to contest their content, should object to other right hon. and hon. Members fulfilling their responsibilities. I do not know, and I doubt that the Minister, despite his estimable talents, could possibly know, how many hon. Members present have received representations on these matters, what those representations have been and whether those representations have necessitated right hon. and hon. Members further debating them on Report. This is the gravamen of the argument against what the Government are arrogantly proposing. It is unacceptable so to truncate consideration of these important matters as to allow approximately three hours for seven new clauses and 20 amendments to be considered on Report.

John Pugh: The hon. Gentleman has said three or four times what the Front-Bench spokesman said once. I see little merit in repeating an argument that was put eloquently from the Front Bench about 10 minutes ago.

John Bercow: The hon. Gentleman never disappoints: he is almost invariably wrong. On the ground of statistical probability, it is conceivable at some stage in the unspecified future that on the law of averages—

Madam Deputy Speaker: Order. That may well be the point, but once again I bring the hon. Gentleman back to the motion.

John Bercow: Thank you, Madam Deputy Speaker. I was saying that the hon. Gentleman might one day be right by accident, but not today. I am sorry that he does not think the matter important. My thesis—

John Pugh: Will the hon. Gentleman give way?

John Bercow: No. The hon. Gentleman is hoist by his own petard and cannot have it both ways. He says that we are taking too long, then prolongs matters with inconsequential and irrelevant interventions. My concern is that we shall have only some six and a half minutes to consider each new clause and amendment. I am not a qualified mathematician or statistician, but that is a generous assessment: it assumes that there are no Divisions, and that we have a seamless debate on all the groups of amendments. However, votes will be held, as part of the healthy tradition of British democracy, which retains some pride and vitality in its lungs. That means that the debating time will be even shorter.
	As my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) has often pointed out—he did so at business questions today—we are again witnessing the triumph of ministerial arrogance over parliamentary propriety. That is unacceptable. It is a derogation of our duty to constituents. It must be steadfastly opposed.

Kevan Jones: I rise to support the programme motion. I had the privilege of serving on the Standing Committee considering the Bill. There was a lot of filibustering in our debates, including an hour spent on the word "but". The Opposition put forward no substantial alternative to the proposals for regional assemblies, although the Liberal Democrats made some vague attempts. A lot of time was spent on anodyne points. This afternoon, the nearly 32 minutes spent filibustering on this motion will eat into the main debate, because the Tories have nothing to say about regional government. They fear that a proper three-hour debate would expose them on this issue.

Jim Knight: Does my hon. Friend recall that, in the debate on the programme motion in respect of the clauses to be debated in the Chamber, we had the same rigmarole, with Opposition Members arguing against the motion but then not staying to take part in the debate?

Kevan Jones: I do recall that. My constituents in the north-east want this Bill, which they consider to be important. The Conservatives are wasting time, and that will not help tackle some of the problems faced by regions such as the north-east. When a referendum is held, I hope that people remember that the Opposition had no alternatives to propose.

Andrew Turner: I am grateful for the opportunity to speak to the programme motion, and shall begin by dealing with a couple of the points raised by the hon. Member for North Durham (Mr. Jones). First, I do not believe that even using the time spent on the programme motion would give us enough time to debate adequately all the substantive business set down for this afternoon.

Kevan Jones: How will the hon. Gentleman justify wasting time this afternoon to my constituents in the north-east, who are keen for the Bill to become law and who have the right to say what happens in their region?

Andrew Turner: I am not sure that it is my duty to justify that to the hon. Gentleman's constituents. My duty is to represent my constituents. The hon. Gentleman must justify to his constituents the business and decisions of the House, and especially the way in which he votes. I would not dream of treading on his toes by expostulating to his constituents—or to the constituents of any other hon. Member—about the direction in which the House is going.
	The House is keen to proceed to the main business, and I shall not detain it any longer. However, many hon. Members not yet present in the Chamber may be aching to contribute, especially in connection with regional boundaries. That applies to those hon. Members who represent parts of the county of Durham that used properly to be part of the north riding of Yorkshire, and to my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins), who represents people detached by the appalling Heath-Walkerian reforms from North Yorkshire. It applies also to my hon. Friend the Member for Ribble Valley (Mr. Evans), some of whose constituents used to be in North Yorkshire.
	I could go on, but I see that that would not be welcome. I am sure that the House takes my point, and I hope that the programme motion will be defeated.

Question put:—
	The House divided: Ayes 292, Noes 153.

Question accordingly agreed to.
	Resolved,
	That, having regard to the Resolution of Standing Committee A, reported on 19th December 2002, the programme order of 26th November 2002 in relation to the Regional Assemblies (Preparations) Bill be confirmed.

Regional Assemblies (Preparations) Bill

Not amended in the Committee and in the Standing Committee, considered.

New Clause 2
	 — 
	Further Referendum on Petition

'(1) This section applies if an elected assembly for a region has been established pursuant to a referendum held under section 1(1).
	(2) The Secretary of State shall by order cause a further referendum to be held in a region specified in the order if he is presented with a petition requesting such a referendum signed by not less than 5 per cent. of the electors eligible to vote in the region as defined in section 3(1).
	(3) The question to be asked in a referendum held pursuant to an order under subsection (2) above is the question set out in section 2(1).'.—[Mr. Hammond.]
	Brought up, and read the First time.

Philip Hammond: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss the following: Amendment No.12, in page 3, line 15 [Clause 5], leave out 'five' and insert 'ten'.

Philip Hammond: Mindful of what was said in the previous debate, I shall attempt to be brief. The main issues of concern to hon. Members mostly fall in the second group of amendments, so I hope that the debate on this group will be relatively short.
	Clause 1 provides for regional referendums to be held on creating elected regional assemblies. There is no provision for a threshold for turnout or, indeed, a threshold for yes votes. Hon. Members will be mindful of what happened in the Welsh Assembly elections. Clause 5 will give the Government the power to hold repeat referendums—if they fail the first time, they can try again after a five-year gap—so a ratchet effect is being introduced.
	The Government need to achieve only a tiny majority on a tiny turnout, once, to create an elected regional assembly. They will need to shift public opinion only momentarily to get their way, and they will get as many goes as they like at achieving that. In effect, in a region where a referendum has been fought and narrowly lost, a sword of Damocles will hang over local government in that region.
	Under the Government's proposals, an elected regional assembly will necessarily involve the abolition of one of the tiers in two-tier local government areas. It will be impossible for local authorities in those areas to continue to carry out their functions, to improve the delivery of public services and to recruit and retain good staff with the constant threat of a further referendum just five years down the line, and therefore the possibility of abolition or reorganisation.
	This group of amendments consists of two parts. New clause 2 would insert the concept of citizen-initiated recall ballots. If an elected regional assembly were established and 5 per cent. of the electorate in that region petitioned for a new referendum to be held, the Secretary of State would have to call a new referendum and exactly the same question as before would be put.

Jim Knight: The hon. Gentleman says that a sword of Damocles should not hang over people in local authorities because of the uncertainty that their arrangements may change if regional assemblies are created. He is now arguing in the new clause that a sword of Damocles will similarly hang over people because the arrangements might change back again. Is not that contradictory—or is that just what we are used to?

Philip Hammond: The Bill will allow the Government to hold a second referendum on a whim, but we propose to give effect to the will of the people. We have to have things one way or the other. We need either sensible periods between referendums and sensible thresholds so that a tiny majority in a tiny turnout cannot determine the issue, or a mechanism for going back if it all turns out to be a dreadful mistake.
	New clause 2 would allow mature reflection. It would deal with the situation where the elected regional assembly perhaps turns out to be something rather different from what the electors had been led to believe, bearing in mind that no legislation setting out the powers and functions of elected regional assemblies will be available to them at the time of the referendum. It would allow a wake-up call for the silent majority. It would allow a route back from what the Government would like to see as a one-way ratchet.
	New clause 2 would allow an assessment to be made based on the experience of an elected regional assembly in operation and the unitary organisation of local government that that necessarily involves, rather than one based only on the Government spin that would be available before the referendum. The threshold of 5 per cent. that is proposed, which is similar to that for mayoral ballots, is a tough target. It is not so easy to organise a petition of 5 per cent. of all the electors in a region.
	We oppose the currently proposed elected regional assemblies because they will not address the real problems created by the Government's centralising tendencies and they will not address the issues facing England post devolution, but we do believe in democracy. Certain safeguards need to be put in place because elected regional assemblies are not just matters for individual regions; they concern the whole of England. If those safeguards can be put in place—some of them will be dealt with in the debate on the second group of amendments—we are confident that, in a fair and open ballot where all the people of England have an opportunity to express their views on a settlement for England, the Minister will get his answer. We are confident that our view will prevail.

Kevan Jones: I am pleased that the hon. Gentleman has clarified the fact that the Conservatives will oppose regional assemblies. However, you said in Committee that you recognised that people in the north-east are interested in having a regional assembly. Will the Conservative party in the north-east therefore oppose the establishment of a regional assembly there?

Philip Hammond: I am sure, Madam Deputy Speaker, that you did not say anything in Committee, but it is important to put on record the fact that I certainly recognised in Committee that there are concerns in the peripheral parts of England about the centralising tendencies. [Interruption.] There is nothing pejorative about the word "peripheral".

Joyce Quin: Yes, there is.

Philip Hammond: No, there is not. It is a geographical term, and there is nothing pejorative about it at all.

Christopher Leslie: Can the hon. Gentleman say where the central heart of England is?

Philip Hammond: If the hon. Gentleman had allowed me to finish, I was about to say that I recognise that there is concern in the geographical periphery of England about the London-centred Government and their centralising tendencies, grabbing power and accumulating it in Whitehall. That is a fair point, and I have acknowledged it in Committee. We simply do not believe that the Government's chosen route is the way to address that issue. We do not believe that it presents a plausible, credible and durable solution for all of England, post the devolution settlement for the nations of the United Kingdom.

Kevan Jones: rose—

Philip Hammond: I said that I would try to be brief; I shall give way once more to the hon. Gentleman and then I want to make progress.

Kevan Jones: Can the hon. Gentleman confirm whether the Conservative party in the north-east will campaign for a no vote in any referendum there?

Philip Hammond: I suspect that the Conservative party in the north-east will campaign for a no vote in any referendum there. However, we are now dealing with provisions for further referendums if such referendums are held and are unsuccessful from the Government's point of view, and if there is a rejection in relation to amendment No. 12. Indeed, under new clause 2, we want to create an opportunity for a recall ballot if there is a yes vote.
	The point is that a fair and open process is not being proposed. Electors are being asked to vote blind. They will not know what the powers of the new assembly will be. They will be asked to vote for regions that have no identity and, in many cases, little credibility. They will be asked to vote for local government reform, the effect of which they will not know until it has happened. The Government want to create a one-way ratchet so that there is no going back. In the absence of any requirement for threshold of support for the creation of elected regional assemblies, with an ability for repeat ballots every five years and because electors will be voting blind, simple fairness and equity demand that there is a way back, and new clause 2 would provide it.
	Amendment No. 12 addresses the provisions in clause 5 on repeat referendums. Clause 5 will allow repeat referendums to be called every five years. I have discussed that with business, interested organisations and local government members, and we believe that five years is too short a period for pragmatic reasons. If a referendum were lost, to have the threat of a further ballot in just five years' time would plunge local authorities in that region into chaos. There will be recruitment and retention problems and service delivery problems.
	Repeat referendums will effectively create a state of permanent campaign for the ensuing four years or so. That is not in the interests of the citizens of any region. It is not in the interests of good local government, and it is certainly not in the interests of what should be the Government principal objective: improving the delivery of public services. The public want the Government to focus on public service, and they want their local authorities to deliver them. So five years is a recipe for chaos. I suggest that 10 years is the minimum period acceptable from a practical point of view. We tested various other periods in Committee. I hope that the Minister will be persuaded that 10 years is a sensible compromise.

Jim Knight: I listened with care to what the hon. Gentleman said about amendment No. 12, but I do not see any time limit in new clause 2 about the reversal process. Is that an omission or does he think that people should be able to get together 5 per cent. and reverse the result of a referendum at any time?

Philip Hammond: The hon. Gentleman is right. There is no provision for a time limit on repeated recall ballots. I considered that issue. I envisaged that the Minister would raise it. If he is prepared to concede that time limits are sensible and that a recall ballot is a good mechanism and needs to be time limited and if he will propose or accept a sensible time limit on repeat referendums under clause 5, I shall certainly consider withdrawing this new clause. I should be happy if the Minister would table a new clause in the other place which would create a symmetry, so that referendums for the creation of elected regional assemblies and referendums for the winding up of elected regional assemblies on a citizen initiative have an equal, level playing field. The hon. Gentleman makes a fair point. If the Minister is prepared to take that on board, at last we are beginning to achieve something.

Edward Davey: If the Conservatives press the amendments to a vote we shall oppose them. They want to pass these amendments because they want to wreck the anti-devolution movement. These powers should be vested in the regional assembly. When the Government introduce a powers and functions Bill for the regional assembly, as I hope they will, I hope that they will put forward a proper constitution for those bodies. When those bodies are created it should be up to them to decide whether there is an opinion in the region that the assembly should be dissolved. It is not for the Secretary of State or Whitehall to decide that after devolution has taken place. The Conservatives may have a point in that the people of the regions should have a way of changing that constitution, but the new clause is not the way to do it.

Philip Hammond: I have some sympathy with what the hon. Gentleman said, but he often seems to live in an ideal world. Has he heard of the concept of turkeys never voting for Christmas?

Edward Davey: The hon. Gentleman is into pejorative words today about voters and parts of the country. Those whom he calls turkeys are the people who will vote for the assembly members. If voters want to vote in people who will dissolve the assembly, they will be free to do so. This is an inappropriate system. The hon. Gentleman suggests that we are living in some sort of cloud cuckoo land. He is completely wrong. We want regional devolution because we want the quango state that the Conservatives created democratised. That is what is important. When the quangos have been abolished, it could be up to the people of the region to decide whether they have faith to continue with regional assemblies. We shall vote against the Conservative amendments.

Gary Streeter: I support these amendments. The Government are proposing an imperfect constitutional settlement. I cannot really believe that they intend that the long-term constitutional arrangements for this country should involve some parts with elected regional assemblies and others without. That is not a sustainable framework. It is important, therefore, that there is some recall mechanism in place so that the people of the region can undo the wrong which they may come to realise they have done.
	We keep talking about the north-east but that is something of a distraction because we are legislating for the entire country. If arrangements need to be put in place for a particular area, let us talk about it, but let us not legislate for everyone just because of one corner—albeit an important corner—of the country. By the way, we in the south-west are peripheral. That is not a pejorative thing to say; it is a fact of geography—we are a long way from the centre. We need mechanisms to undo what may be done. If the north-east goes down this route and votes blind for an elected regional assembly, in a few years time people there may come to think that it is an expensive talking shop and brings them no benefit whatever.

Jim Knight: Is it Conservative party policy to offer a recall referendum for the Greater London Assembly?

Gary Streeter: The hon. Gentleman knows full well that there is none in place. My answer is that we would not start from here. If the hon. Gentleman believes that the appointment of the Mayor of London has been a terrific success, I invite him to think again.
	It may not be just the north-east that votes for an elected regional assembly. We have heard that the north-west does not believe itself to be a coherent region, nor does the west midlands. Other parts of the country have shown little interest in this proposal, but there are defensive reasons why such parts may find themselves voting for an elected regional assembly. They may then have even more reasons to seek to undo that decision in future.

Louise Ellman: Is the hon. Gentleman aware that a MORI poll showed that in the north-west there was 97 per cent. identification with the region? Is he further aware that a BBC poll showed that over 72 per cent. of people in the north-west supported a directly elected assembly?

Gary Streeter: I was aware of neither. I was basing my assumptions on comments that I have heard the hon. Lady's colleagues make in this Chamber and in Committee as the Bill has proceeded, that the north-west does not consider itself to be a coherent region and there is little interest in this measure.

George Howarth: Is the hon. Gentleman aware that one of his hon. Friends and I took part in a debate on Granada television, following which there was a telephone poll, and that the majority of people who responded were opposed to a north-west regional assembly?

Gary Streeter: I hate to intrude on a private grief. Sadly we do not get Granada television in the west country, or at least not very often, unless it broadcasts "Coronation Street".
	Although other parts may not want an elected regional assembly it is possible that because another region or other regions have plumped for it, they feel that in some intangible way they are missing out. They might mistakenly follow the same route. People make decisions for all sorts of reasons. Therefore, some sort of recall mechanism should be in place.
	I was interested the other day when we debated the House of Lords that an hon. Gentleman spoke powerfully about how in Scotland many people are realising that the electoral settlement of Members of the Scottish Parliament elected on a list system was causing chaos and confusion in Scottish constituencies and wish that more thought had been given to that. I got the impression that many in Scotland wished to undo that particular mechanism. Elected regional assemblies may cause confusion with people who are elected to sit on those assemblies tripping over the toes of Members of Parliament and vice versa, colliding with MEPs going about their duties, and stepping on the toes of local councillors. I predict that there could well be immense confusion about respective functions, responsibilities and powers. That in itself may cause right hon. and hon. Members to reconsider their opinions on whether elected regional assemblies are right. That is another reason why there might be a recall mechanism.
	My hon. Friend is right that 5 per cent. is a high threshold. Such a percentage cannot be put together on a wet Sunday afternoon. A lot of people have to sign a petition. That gives the Government all the reassurance that they need that it would not be lightly triggered, but would be available if people felt strongly.
	Finally, I shall deal briefly with amendment No. 12, which I would like to support. I know from discussions with local authorities throughout my constituency that there is little likelihood of the south-west going for a regional assembly—I have never met anyone in my part of the region, Devon and Cornwall, who is in favour of it—[Interruption.] Hon. Members may disagree, but I remind them that Dorset is not in Devon and Cornwall. No one has mentioned it to me on the doorstep, and I have not had a single letter or phone call to my constituency office saying, "If only we had an elected regional assembly, all of my problems would be over." There is no interest in that in my part of the world.
	Because local government is charged with looking ahead and looking around corners, however, it is already planning what might happen if there were a south-west elected regional assembly and what might be the impact on local councils. As I have said previously, West Devon borough council was already having meetings about how it would respond if there were an elected regional assembly, several years down the track, and the Electoral Commission were to conclude that Devon should be carved up into two or three unitary authorities. Its contingency plans have already introduced uncertainty, and if, every five years, the sword of Damocles is to hang over local government—which, as my hon. Friend rightly says, will have a great impact on recruitment and retention and the sense of security and stability—that will be an unnecessary infliction on its exercise of its lawful and statutory duties. I urge the Minister, who is reasonable, sensible, sensitive and impressive—

Christopher Leslie: Which Minister?

Gary Streeter: Both the Under-Secretary and the Minister for Local Government and the Regions. I hope that they will think about that and change five years for 10 years in the Bill, and that they will agree to a recall mechanism, too.

Desmond Swayne: I support entirely the thrust of amendment No. 12 tabled by my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond). I am concerned, however, about the threshold of 5 per cent. I would have welcomed a lower threshold although I wholly support the principle of the amendment.
	To illustrate the difficulty of achieving that 5 per cent., I draw the attention of the House to the question that was tabled by my hon. Friend the Member for New Forest, East (Dr. Lewis) on 20 January. He asked the Minister for Local Government and the Regions,
	"how many representations he has received from electors living in (a) the south-east region, (b) Hampshire and (c) New Forest East constituency in favour of the establishment of an elected regional assembly".
	The answer given by the Minister was that
	"between the dates of 9 May 2002, when the White Paper was published, and 30 November 2002, the office of the Deputy Prime Minister recorded 18 respondents from the south-east who were in favour of an elected regional assembly . . . of whom two were from Hampshire."—[Official Report, 20 January 2003; Vol. 398, c. 168W.]
	In relation to getting a 5 per cent. threshold, I draw my hon. Friend's attention to the fact that there are some 6 million electors in the south-east region.

Philip Hammond: It is worse than my hon. Friend fears: there are 8 million electors in the south-east region. I understand his concern. I thought long and hard about the figure of 5 per cent. and I tabled it in an attempt to reach for some consensus or centre ground on which I hope that the Minister and I can meet. It does not seem to me an unreasonable suggestion that there should be some recall mechanism. While I know that my hon. Friend takes a rigorous view on these matters, I hope that by going for 5 per cent. I will demonstrate to him that I am reaching out to the Minister in a spirit of compromise.

Desmond Swayne: I am persuaded and reassured by my hon. Friend, who, throughout the Committee proceedings, was entirely reasonable, as he is being now. I will follow his lead and accept 5 per cent. Nevertheless, Labour Members should be reassured that 5 per cent. will be very difficult to achieve.

Jim Knight: Given everything that the hon. Gentleman has said about the difficulty of reaching a threshold of 5 per cent., would it not have been easier to have listened to the hon. Member for Kingston and Surbiton (Mr. Davey)—I know that that is difficult, but on this occasion he is correct. It would be much easier for electors to elect people to a regional assembly and have them dissolve themselves in the same way that electors in the European elections, I am afraid, occasionally vote for the UK Independence party in the full knowledge that it is standing to dissolve a Parliament with which it does not agree.

Desmond Swayne: Turkeys do not generally vote for Christmas. Once an elected assembly is established there is little prospect of it dissolving itself. What this carefully crafted new clause does is to provide a means by which citizens can initiate the political process and exercise people power: power for the greater part of the population as expressed in terms of the 5 per cent. requirement in the petition.

Christopher Leslie: Will the hon. Gentleman, who is moonlighting in his usual role as a Whip, say whether, being so persuaded of the need for a 5 per cent. trigger mechanism, or any trigger mechanism, he feels, as my hon. Friend the Member for South Dorset (Jim Knight) pointed out earlier, that that should also be applied to the Scottish Parliament and the Welsh Assembly?

Desmond Swayne: I do not want to stray from the terms of this debate, which is on the regional assemblies. I am therefore not prepared to be tempted by the Minister to go beyond that brief. I was interrupted in the train of thought that I was drawing to the attention of the House with respect to the difficulty of achieving a petition of 5 per cent. of the electors. As my hon. Friend the Member for Runnymede and Weybridge says, the south-east region has 8 million electors. Eighteen responses were received in favour of a regional assembly. In Hampshire, there are more than 960,000 electors—not people, electors—but there were only two respondents in favour of the proposals. The Ministers know their uphill task. They have therefore devised an ingenious mechanism: any response whatever is counted as interest in favour of a referendum. The fact that someone might be wholly against an assembly, and might write to say so, will nevertheless be counted as someone expressing an interest in a referendum. Our task in securing a petition will not be nearly so easy as the method that the Ministers have devised for themselves.

Andrew Turner: I am shocked and amazed at the implicit duplicity of Ministers if, as my hon. Friend asserts, they should count a clear expression of objection to a regional assembly as an argument in favour of a referendum. I know of the huge amount of work that has been done by our colleagues, MEPs representing the south-east, in campaigning against a referendum. Is he saying that Ministers are genuinely taking such expressions against as expressions of interest in a referendum being held?

Desmond Swayne: I will preface my answer by saying that I am keen to move on to the next group of amendments. My hon. Friend should study the Official Report of the Standing Committee, as this was an issue that the Committee considered in some depth. The position is precisely as he fears.

Jim Knight: Does the hon. Gentleman not recall the hon. Member for Runnymede and Weybridge (Mr. Hammond) talking about the sword of Damocles and about his concerns about the effects on people in local authorities? Is it not valid for a community to decide to campaign for a referendum so that it can resolve the issue even if it is against an assembly? It is perfectly valid for people to organise for a referendum so that they can say no.

Desmond Swayne: I doubt very much that the people writing to the Secretary of State to say that they do not want a regional assembly have any idea that their letters are counted as though they are in favour of holding a referendum.
	My hon. Friend the Member for Runnymede and Weybridge has provided a mechanism by which we can put an end to the ratchet effect and can avoid what I described in Committee as African democracy. We want one man, one vote, once. Then the matter will be settled and there will be no going back. That is the reverse of what Ministers have provided for the proponents of regional assemblies. They will be able to go on ad infinitum and hold referendums every five years. It is therefore entirely appropriate to accept amendment No. 12 and to make the figure 10 years. In Committee, I argued for 20 years—a generation—but I will accept my hon. Friend's reasonable compromise of 10 years.

Andrew Turner: I want to make two points. The first is to admit that I am a little confused by the speech of the hon. Member for Kingston and Surbiton (Mr. Davey). The question is, who are the turkeys? He asserted, in response to my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), that the description of turkeys voting for Christmas was a slur on the electorate in a given region. I do not think that it was a slur. The epithet "turkeys" was addressed not to the electors in the region, but to the members of the putative assembly.

Philip Hammond: indicated assent.

Desmond Swayne: indicated assent.

Andrew Turner: My hon. Friends nod in agreement, so we have got that clear. The hon. Member for Kingston and Surbiton was slightly wrong.
	My second point was about the threshold that the electors—not the turkeys—would have to achieve under the new clause to enable a second or recall referendum to take place. I disagree with the assertion of my hon. Friend the Member for New Forest, West (Mr. Swayne), because I have experience of petitions being obtained for a whole range of purposes.
	Before 1997, I was pleased to assist schools with the complex but invigorating process of achieving grant-maintained status. It was necessary for 20 per cent. of the parents of the pupils registered at a school to sign a petition for a referendum, which was conducted by postal ballot, to take place. A huge number of parents from almost 2,000 schools were willing to sign a petition. They signed up in such numbers that referendums were called. It is not difficult to reach a threshold of 20 per cent., or one that is even higher than that.
	I cite the case of the west Wight ambulance or the Tennyson ambulance, as it is called. It was given to the area by the widow of Alfred Lord Tennyson, who was a distinguished resident of the west Wight. The ambulance serves the area covered by the parishes of Freshwater and Totland, the town of Yarmouth and the parish of Brighstone in my constituency. That area has a population of about 8,000. However, when the Isle of Wight Healthcare NHS trust proposed to redeploy the Tennyson ambulance, I received a copy of a petition signed by 4,000 electors—such was the level of interest in the deployment of a single ambulance. Imagine the level of interest that there would be in the deployment of the many millions of pounds that Labour Members wish to tear out of the grip of electors and hand over to the bogus assemblies. As it would not be difficult to achieve a 50 or 20 per cent. threshold, it is reasonable to propose a 5 per cent. threshold, and my hon. Friend the Member for Runnymede and Weybridge is to be commended for that.
	My hon. Friend the Member for New Forest, West also referred to people power. Putting power into the hands of the electors is the best way to determine such issues. It is not right to call the electors turkeys. I challenge the hon. Member for Kingston and Surbiton to tell me when a regional or national Assembly has voted for its own dissolution. If he can provide a substantial example of that, I might be forced to conclude that new clause 2 does not justify my support, but I do not believe that such an example exists.
	I want to echo one or two remarks that my hon. Friend the Member for South-West Devon (Mr. Streeter) made on the frequency of referendums. The referendums will be deeply unsettling. They will entail the abolition of a tier of local government and redeployment of a huge number of local government staff and officers. That will make recruitment to those posts difficult. It is better to enable local government to operate in a stable environment—indeed, that is the objective of the Minister for Local Government and the Regions—but knowing that the sword of Damocles hangs over the assemblies every five years does not contribute to stability.

Christopher Leslie: Thank goodness the Conservatives objected to the programme motion. They clearly wanted to spend much more time debating the main issues. It is a shame that only two of their Back Benchers are in the Chamber. Perhaps they will flood in later for other groups of amendments.
	The Conservatives are using new clause 2 to introduce the right for 5 per cent. of the electorate to sign a petition to requisition a further referendum on the establishment of an assembly once it is up and running. That would be a recipe for uncertainty and extremely disruptive to the operation of an assembly. Elected regional assemblies will be strategic and focus on the long term so they need certainty. What would happen if such a petition was successful, a further referendum was requisitioned and people voted to abolish the assembly? New clause 2 gives no idea of who would take on the assembly's responsibilities. Would they return to Whitehall?

Philip Hammond: The reason for that is that nowhere in the Bill is there anything about what the assembly's responsibilities might be. The Government are inviting people to vote blind in a referendum for elected regional assemblies. We will have to wait a long time before we see the legislation that sets out their powers.

Christopher Leslie: Well, goodness gracious me, if the hon. Gentleman has not noticed the voluminous White Paper "Your Region, Your Choice", which describes in great detail the roles, functions and activities of elected regional assemblies, he may need to do a bit more research.
	A 5 per cent. threshold to trigger a further referendum would be unprecedented in our constitution. No other body has a 5 per cent. threshold for a re-ballot. My hon. Friend the Member for South Dorset (Jim Knight) asked the interesting question of whether the Conservatives would apply it to the Greater London Authority. The same could be said of the Scottish Parliament and the Welsh Assembly. [Interruption.] The Conservatives, including one of their Front-Bench spokesmen, the hon. Member for New Forest, West (Mr. Swayne), who is temporarily on the Back Benches, suggested that that was not within the Bill's scope, but I think that they were frightened to answer the question. If they believe that people should be able to challenge a decision to devolve powers and create an assembly or Parliament as a right, they should say whether that would apply to all parts of our country. I am surprised that they could not face up to that.
	A 5 per cent. minority being able persistently, vexaciously and repetitiously to frustrate the settled will of the majority of people in a region would be not only a distraction but extremely costly and wasteful. There would be the costs of the referendums and of demolishing an elected regional assembly once it had been set up.

Andrew Turner: The Minister suggests that a 5 per cent. minority is unsuitable to cause a recalled referendum. What level of interest does he regard suitable to cause an initial referendum?

Christopher Leslie: That is also set out in the White Paper. We are trying to give people the opportunity to make a choice. We are not talking about the establishment of an assembly, but simply about whether there should be a referendum to establish one. The hon. Gentleman opposes giving people a choice and letting them express their will in a referendum.
	It is most unfortunate, but it is important to say that I agree with the suggestion of the hon. Member for Kingston and Surbiton (Mr. Davey) that the electorate have the perfect capacity to elect people to run these assemblies and then say what those assemblies should be doing. The new clause is not necessary because people would have every opportunity both to consider the merits of an assembly in the initial referendum and to shape that assembly every four years in elections to it.

Edward Davey: Will it be the Government's intention when they introduce a Bill on the powers and functions of regional assemblies to create a constitution for them to allow an elected party to such an assembly to dissolve it?

Christopher Leslie: Obviously, we shall have to look at that nearer the time, but I imagine that most Members would accept that Parliament is perfectly capable of making a judgment on the continuity issues of any assembly. I believe that that deals adequately with the point raised by hon. Members who want to consider the question of dissolving an assembly.

Philip Hammond: I do not want to fight the battles of the hon. Member for Kingston and Surbiton (Mr. Davey) for him, but this is an important point because it drives a coach and horses through what the Minister is saying. Will an elected regional assembly have the power to dissolve itself or not?

Christopher Leslie: Parliament decides to set up devolved authorities and assemblies, so that will be a matter for Parliament.
	I am curious about the Conservatives' claim that once an elected regional assembly is established, voters should have the opportunity to change their minds whenever they want. However, amendment No. 12 would deny voters in a region without an assembly the chance to change their minds for 10 years. They want to impose a minimum 10-year gap from the date of a no vote to when any subsequent referendum can be held in the same region. That is completely inconsistent and unfair.

Philip Hammond: If the Minister is prepared to agree on behalf of the Government to accept the 10-year provision in clause 5, I would certainly be willing to withdraw new clause 2 and retable it in the Lords to include a 10-year lockout.

Christopher Leslie: The hon. Gentleman brings me to my next point: precisely why a 10-year gap is wrong and why we oppose the measure.

Desmond Swayne: Tease!

Christopher Leslie: I should like to tease the hon. Gentleman over what he said in Committee. It was interesting that he argued for a 20-year gap, saying that he wanted to distance himself from the CBI suggestion of a 10-year gap. He said:
	"I am not so concerned about the limit of 10 years that the CBI suggested. I think that our amendment suggesting a limit of 20 years is about right."
	When asked by my hon. Friend the Member for North Durham (Mr. Jones) whether he actively disagreed with the CBI, the hon. Gentleman said:
	"I do in this case. I think that the period should be a generation",
	and he repeated that today.
	The hon. Member for Runnymede and Weybridge (Mr. Hammond) did not weigh in to support his hon. Friend, as he did in Committee, when he said:
	"The CBI is looking at these matters from the narrow perspective of business . . . However, it cannot be a concluding perspective".—[Official Report, Standing Committee A, 3 December 2002; c. 26-30.]
	The fact that the Conservatives have changed their mind and accepted the 10-year gap in the space of just one month proves my point. People can change their minds in less than 10 or 20 years. The Government's five-year interval strikes the right balance between a reasonable opportunity for people to change their minds and the avoidance of uncertainty and the repeat costs of a referendum. A five-year gap is a minimum—the exact period will depend on the soundings of opinion taken by the Secretary of State—and there is not a requirement to hold referendums in a five-year cycle. The Government have not plucked that five-year figure from the air. As Members will know, five years is the maximum interval between general elections and is also the standard interval for European parliamentary elections. I believe that five years is the right interval. I hope that Opposition Members will not persist with their new clause and amendment and I urge them to withdraw them.

Philip Hammond: The Minister is skating on extremely thin ice. In the space of about two minutes, he said that people can change their minds and should have the opportunity of repeat referendums within a period of no more than five years to try to create an elected regional assembly, but then set his face firmly against the idea that, having voted for elected regional assemblies, people may change their mind and wish to do away with them. In response to a question from the hon. Member for Kingston and Surbiton (Mr. Davey), he made it clear that elected regional assemblies will not have, as the hon. Gentleman would like, the power to abolish themselves. Electors electing those assemblies will not have the UK Independence party option referred to earlier of electing members committed to the abolition of the assembly.
	The Minister's position is therefore inconsistent. He put administrative convenience above democracy and displayed breathtaking arrogance, as he said that it is all right for Ministers to have the disruptive power to impose referendum after referendum until they achieve their objective, then a ratchet operates and things can never go back to the way they were before. However, he said that it is not all right for the people the have the power through democratic action to call a referendum and reconsider a decision. I urge my right hon. and hon. Friends and, I hope, all other right-minded, right-thinking Members to support me in pressing the new clause to a division.

Question put, That the clause be read a Second time:—
	The House divided: Ayes 121, Noes 342.

Question accordingly negatived.

New Clause 3
	 — 
	Pre-Referendum

'(1) Subject to subsection (3), the Secretary of State may by order cause a referendum to be held throughout England about the establishment of elected regional assemblies and the reorganisation of local government within regions with elected assemblies.
	(2) The date of the referendum must be specified in the order.
	(3) No order under subsection (1) may be made unless a draft order under subsection (1)(a) of section (Regional Boundaries) has been published.
	(4) The questions to be asked in a referendum held in pursuance of an order under subsection (1) are—
	"(1) Do you support the proposals for the creation of regions in England, as proposed by the Secretary of State and the subsequent holding of regional referendums in regions where sufficient levels of interest exist, about the creation of elected regional assemblies?
	(2) Do you support the idea of reorganising local government in areas that currently have both county and district or borough councils into single tier unitary authorities if an elected regional assembly is created?".
	(5) The questions must be preceded by a statement from the Electoral Commission, setting out any information it believes requisite for the proper understanding by persons entitled to vote of the questions.
	(6) Sections 3 and 4 of this Act shall apply, mutatis mutandis, to a referendum held pursuant to subsection (1).'.—[Mr. Hammond.]
	Brought up, and read the First time.

Philip Hammond: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss the following:
	New clause 4—Certification prior to referendum—
	'.(1) Before making an order under section 1(1), the Secretary of State shall satisfy himself that, during the period of twelve months prior to the laying of the order, neither the Regional Chamber nor the Regional Development Agency within the region to be specified in the order have carried out any activities which they do not have power to carry out and which are intended to influence the outcome of such a referendum.
	(2) The Secretary of State shall, prior to making an order under section 1(1) and after satisfying himself in accordance with subsection (1), issue a certificate confirming that he is so satisfied.'.
	New clause 6—Definition of Regions—
	'(1) The Secretary of State may by order define regions for the purposes of this Act.
	(2) In exercising his power under subsection (1) the Secretary of State shall define Cornwall as a region.
	(3) An order under this section shall be subject to affirmative resolutions of both Houses of Parliament.'.
	New clause 8—Regional boundaries—
	'(1) Before making any order under Parts 1, 2 or 3 the Secretary of State shall—
	(a) invite all local authorities in England (except London) to submit to him proposals for the creation of regions for the purposes of this Act; and
	(b) invite such other persons and bodies as appear to him to represent relevant interests throughout England (except London) to submit to him proposals for the creation of regions for the purposes of this Act; and
	(c) upon receipt of submissions in response to paragraphs (a) and (b) invite the Electoral Commission to comment on the submissions and to make proposals to the Secretary of State for the creation of regions for the purposes of this Act having regard to—
	(i) the desirability of all regions being, in so far as is not incompatible with (ii) below, of approximately equal population size; and
	(ii) the need to reflect the identities and interests of local communities
	(d) publish the proposals made to him by the Electoral Commission under paragraph (c); and
	(e) make an order creating regions for the purposes of this Act, having regard to the proposals published under paragraph (d).
	(2) For the purposes of this section "relevant interests" means professional bodies, trades unions, voluntary organisations, faith groups, political parties, business organisations and community organisations.
	(3) For the purposes of subsection 1 paragraphs (a) and (b), the Secretary of State shall set out a timetable for the giving of responses to him.'.
	Amendment No. 2, in page 1, line 8 [Clause 1], at end insert—
	'(2A) No order may be made under subsection 1 unless a referendum has been held pursuant to section (pre-Referendum) and the Secretary of State has considered the result of the referendum and determined on the basis of it that sufficient interest exists in the creation of elected regional assemblies.'.
	Amendment No. 26, in page 1, line 13 [Clause 1], leave out 'made recommendations' and insert
	'been directed to prepare to carry out a review'.
	Government amendment No. 4.
	Amendment No. 15, in page 13, line 3, leave out clause 26.
	Amendment No. 3, in page 13, line 4 [Clause 26], leave out from first 'region' to end of line 5 and insert
	'is as defined in an order made under section (Regional Boundaries)'.

Philip Hammond: Clause 1 grants the Secretary of State the power to call referendums in specific regions. The amendments deal with the pre-conditions for them.
	The Government are going off at half-cock. They are so anxious to proceed that they are building on sand. If they want regional devolution and elected regional assemblies, they should start by sorting out the regions. They should then ascertain whether there is a genuine appetite for the regional assembly solution throughout England, including for the local government reorganisation that they have linked inextricably to elected regional assemblies. The third tick in the box before embarking on the devolution road is ensuring that no hanky panky is happening in the regions and that no existing bodies are doing things that perhaps they should not.
	New clause 8 is the key to the group. Two big issues have dominated our debates about the Bill in Committee and on the Floor of the House. First, the Government have decreed that local government reorganisation is a necessary concomitant of elected regional assemblies. New clause 3 covers that. Secondly, we must consider the shape of the regions. The Government are accused of focusing on only one or two regions and not proposing a genuine all-England solution. Their proposals thus ignore the fact that many English regions lack coherence and credibility for the purpose that the Government support.
	Most regions simply do not stack up.
	The areas of the Government offices for the regions, which the Government are now proposing to follow, were created for a completely different purpose, namely, administrative convenience and the delivery of administrative government throughout England. I understand that their origin goes back further than that, because the boundaries on which they are based were originally derived from the wartime division of Britain into direction of production regions for food and agricultural planning purposes. That is quite different from the matter now before us. They were never intended to be coherent democratic units. They have been given spurious credibility by being used as the basis for the regional development agency boundaries, but they were never intended to be democratic geographical units.
	There are huge disparities of geography, economic strength and population between the different regions. The north-east region, for example, has a population of 2.5 million, compared with the south-east region's 8 million, which is more than three times as many. The north-east has a gross domestic product of £26 billion, against some £132 billion in the south-east, which is more than five times as much. The north-east region is the smallest, geographically, with 8,500 sq km, while the south-west's proposed region has a superficial area of 23,000 sq km. The north-east has 30 parliamentary constituencies, compared with the 83 that the south-east actually has, and the 96 that it would have if the distribution of parliamentary seats were proportional to population.
	So the north-east is by far the smallest region—I do not say that in a pejorative sense—on every criterion, yet the whole structure builds around it. It will almost undoubtedly be the first to go for a referendum, and most hon. Members agree that it is the most likely to agree to an elected regional assembly. Perhaps this is no coincidence. The smaller the region, the greater the chance of a coherent identity in that region—we shall no doubt hear later from the hon. Member for St. Ives (Andrew George), who is not in his place at the moment, about the claims of Cornwall to be an identifiable region—but the Government have set their face firmly against any attempt to create real, meaningful regions.
	During the course of our deliberations on the Bill, we have heard from Members on both sides of the House that people in north Shropshire do not regard themselves as part of the west midlands, that Oxford does not have very much in common with Dover, and that south Essex has an entirely different focus from Cambridge or the north Norfolk coast, yet they find themselves in the same region. The south-west region consists of very disparate entities and communities that do not see themselves as a region at all. In our last debate on the Floor of the House, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth) referred to the north-west region as "the fictional north-west". All these regions have a common theme: they have no natural centre, no natural focus and no coherent sense of identity.

Louise Ellman: Does the hon. Gentleman agree that it is totally wrong to talk about the north-west having a fictional identity, when polls consistently show people in the region identifying very strongly with the north-west as a whole? Is he aware that a recent poll conducted by the north-west constitutional convention found that more than 73 per cent. of people in Merseyside wanted a directly elected north-west assembly?

Philip Hammond: It is not for me to intrude on the private grief on the Labour Back Benches. The words "fictional north-west" were not mine; they were uttered by the hon. Member for Knowsley, North and Sefton, East—another Merseyside Member. I think that this is something that the Merseyside contingent has to sort out for itself, and I shall not contribute further to that particular bit of in-fighting.

George Howarth: It may surprise the hon. Gentleman that I shall not indulge in a debate with my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) at this point. Does he believe that it would be possible, within the compass of new clause 3, to establish systems of city-wide government? If so, does he think that that would be a worthy objective?

Philip Hammond: I was about to mention city government. This is exactly the point that we are trying to make. If a settlement of the English question is to be durable, and if the decentralisation of power in England is to work, it has to start from the bottom up. It has to build on units with which people have an affinity, and with which they can identify. The purpose of new clause 3 is to put in place a consultation process, so that people can say to the Government, "It may take an extra year, but we simply cannot use these Government office regions that were created for a completely different purpose and are completely wrong for this democratic purpose, just for the sake of saving a few months." We must start at the beginning; I agree with the hon. Gentleman.
	I was about to say that I know many Manchester and Liverpool Members are interested in the concept of city government as another way of approaching the decentralisation of government in England, and that is a perfectly legitimate aspiration. Even among supporters of regional decentralisation, however, there is no agreement.
	I was looking—as one does—at the website of the hon. Member for Tyne Bridge (Mr. Clelland) at the time of the last general election. On that Labour party-liveried website, he extols the virtues of something called the northern region to his constituents. He says:
	"The Northern region would include the counties of Northumberland, Tyne and Wear, Durham and Cleveland; and, if the people of Cumbria wish it, Cumbria".
	Interestingly, perhaps intriguingly, that is not envisaged in the Government's proposals, which illustrates one of the problems that they face.
	On his four-page website on a regional assembly for the north, the hon. Member for Tyne Bridge quotes the hon. Member for Manchester, Blackley (Mr. Stringer), who was then a Minister, as saying:
	"The Government intend to bring forward legislation that will enable the electorate within the regions to determine whether they want an elected assembly."
	The hon. Gentleman quotes his hon. Friend as supporting the Government's proposals. We see now, however, that the hon. Member for Manchester, Blackley has serious reservations, not about the principle of regional devolution but about the route that the Government have chosen, and specifically about the choice and use of the old offices of the regions boundaries.
	Many Labour party members who supported the abstract notion of regional devolution had no idea at the time that they were signing up to devolution to the existing administrative regions. It is clear from the White Paper—I confirm to the Under-Secretary of State that I have studied it assiduously—that the Government envisage the offices of the regions working, as the White Paper puts it, hand in hand with the elected regional assemblies. They see an argument for coterminous boundaries. That means, of course, a beefed-up Government office of the regions standing over the elected regional assembly, ensuring that what it does complies with the Government's requirements. It means, in effect, a prefect system.

Joyce Quin: Having followed the debate in the Labour party, I suspect, more closely and for longer than the hon. Gentleman, let me tell him that for a long time the regions covered by the Government office have commanded a wide spread of agreement in the party. They are thought to be the appropriate units on which to build regional government. Regions are not prisons, however. It is perfectly possible for the north-east to co-operate with the north-west or with Yorkshire and Humberside. Rather than always seeing such arrangements as confining, the hon. Gentleman should perceive that this is a new type of politics enabling partnerships to be forged.

Philip Hammond: The right hon. Lady has underlined the fact that the consensus that existed in the Labour party has started to break down as the details have become clear.
	Of course regions are not prisons. What I am suggesting is that if they are to be robust and durable, they must be built on firm foundations. I plead with the right hon. Lady and some of her colleagues from the north-east to understand this. I think they genuinely find it difficult to understand the objection of Members from regions such as the south-east and east of England, which make no sense at all. We understand that their region is probably the most coherent and has the strongest sense of identity. It is also the smallest. Why should we in the south-west, the east and the south-east face the Government's insistence on regions four times the size of the hon. Lady's, with no sense of cultural identity, no coherence and no economic, geographic or historical logic? Why can we not have an input in the process of defining the regions in which we will live and by which we will be administered?

Kevan Jones: Is not the main point about this Bill that it will give the people in those regions the option of whether they want regional government? Why is the Conservative party afraid of giving people a say in how their regions are governed?

Philip Hammond: I go back to the website of the hon. Member for Tyne Bridge. The problem is that, if this is to be a durable solution, it must be a solution for all of England, not just part of England. The hon. Member for Tyne Bridge, perhaps sticking his neck out rather a long way, says on his website with the Labour party masthead on it:
	"English Regional Government is the answer to the 'West Lothian Question'. It will promote innovation and variety in the governance of our country."
	In other words, it will deal with the post-UK settlement for England. If it is going to do that, it must deal with it for all of England. It must not be seen as a sectional solution that addresses the agenda only of certain parts of the country.
	Scotland is a nation. No one could doubt that. London is a city. No one could doubt that, but the south-east region, my region, is nothing. No one feels allegiance to it. No one identifies themselves as a citizen of south-east England. The overwhelming majority of people would not be able to define it, unlike the constituent counties.
	If a geographical region called London and the south-east were created, perhaps that would have a certain coherence and economic and geographical logic, but it would underline the problem. It would be so overwhelmingly the largest region in the country in terms of population, gross domestic product and geographical area that it would make the system unworkable. Therein lies the problem: the messy, inconvenient fact that England cannot be divided neatly into regions that have any meaning for their people unless the Government are prepared to contemplate a significantly larger number of significantly smaller—in some cases—regions.

Andrew George: The hon. Gentleman is making extremely valid points that imply that the Conservatives might be in favour of devolution. On the assumption that they might be, does he agree that the hon. Member for North Durham (Mr. Jones) would be right if the Government gave the people a genuine vote on regions that exist, rather than on synthetic regions that do not and that are therefore destined to fail? The Government will succeed in their plan to establish regional government if they accept the type of flexibility that the hon. Gentleman recommends.

Philip Hammond: That is precisely my point. I make no bones about it. We shall vote against the Bill on Third Reading, but the purpose of Report is to try to improve the Bill. Unless the Minister deals with this issue, he will not produce a workable solution for all of England. It will be a solution that may or may not work in some of the regions—the north-east is the obvious one in people's minds—but it will not work in the south-east region or the east of England region; I do not think that even the Minister for a moment believes that it will. The hon. Gentleman is right.
	The Minister will never create a durable solution that is based on meaningless lines drawn on maps in Whitehall, with as much relevance to the situation on the ground as the lines drawn by colonial 19th century treaty makers on a map of Africa. In unitary areas, the Government propose that regional government will necessarily involve the introduction of another tier of government. In existing two-tier areas, elected regional assemblies will necessarily involve the loss of the historic and much-identified-with counties. Many people will reject that model of regional devolution for a variety of reasons, but the main reason, and the reason why resistance is likely to be least strong in the north-east and greatest in the south-east and east of England, is that people do not identify with the regions that the Government are putting them into.

Jim Knight: The hon. Gentleman says that, by necessity, unitarisation would mean the loss of shire counties, which people identify with. I agree that people identify with the shire county, for example, of Dorset, which I represent, and speaking personally, if there were a unitary structure in my area, I would favour the retention of Dorset as the unitary authority, with the abolition of districts. Nothing has been said by the Government that militates against that.

Philip Hammond: The hon. Gentleman would therefore move the point of government further away from the local community.

Jim Knight: I thank the hon. Gentleman for giving way again and allowing me to expand on what I said. I should like reinvigorated and re-empowered parish and town councils to represent communities in a unitary county. I am pleased that the Department is giving parish councils more power, but I should like that to be extended.

Philip Hammond: I look forward to the hon. Gentleman's elaboration of his thoughts for the counties with smaller populations when he makes his contribution to the debate. The Minister has been coy about admitting it, but for the larger and more populous counties a unitary option is unlikely to be appropriate for reasons of sheer size.

Andrew George: The hon. Gentleman is right. My concern is that it is not in the Government's gift to promise unitary counties, although that may be desirable in certain circumstances. The Government are prejudging the outcome and are putting the cart before the horse.

Nick Raynsford: indicated assent.

Philip Hammond: The Minister nods, but the Bill means that that matter is in the Government's gift. The boundary committee will make a recommendation, but the Bill as drafted means that the Secretary of State will be able to implement that in whole or in part, as he thinks fit.

Nick Raynsford: The hon. Gentleman will appreciate that we have had frequent exchanges on this matter. The boundary committee will be able to resolve the appropriate and best unitary structure, based on counties or districts, or combinations of districts. The recommendation will be for the boundary committee to make. Technically, as the hon. Gentleman knows, the Government will implement the recommendation, but the independent boundary committee will make the decision. That must be right.

Philip Hammond: I hoped that the Minister was rising to accept the amendment that he rejected in Committee, which would have required the Secretary of State to implement the recommendations of the boundary committee in full, if an elected assembly were established in a region. However, that is not what the right hon. Gentleman is doing. He has retained the discretion to implement the recommendations, or not, and to do so in full or in part. That provision is contained in the Bill.

Nick Raynsford: I am sorry to go through this again, but the Committee dealt with this matter in detail. The hon. Gentleman has taken an intelligent and assiduous interest in the matter, and I thought that he would appreciate that the process is modelled entirely on the existing legislation passed by the previous Conservative Government. The existing procedures mean that the Government implement recommendations made by an independent body—in this case, because the structures have changed, that body is the boundary committee.

Philip Hammond: I had not realised that the Government had imposed a self-denying ordinance to the effect that they would only introduce legislation that exactly mirrored what the previous Conservative had done.
	Clause 15(2) states:
	"The Secretary of State my by order give effect to all or any of the recommendations of the Boundary Committee for England".
	That looks to me like a clear ministerial discretion to implement, or not to implement.
	If the Minister wants the proposed structure to work, he must create regions with which people can identify. The Opposition will vote against the Bill on Third Reading, but we are trying to improve the Bill. If the Minister wants it to work, a necessary precondition is that people identify with the regions—all of them in England, not just one or two—that he is trying to build on.
	In Standing Committee, the Minister said:
	"We propose that boundaries for elected regional assemblies should mirror the existing administrative boundaries used by Government offices . . . We believe that those regions reflect a logic in terms of population, geography, economic weight and, in many cases, cultural identity."—[Official Report, Standing Committee A, 12 December 2002; c. 227.]
	I have enough respect for the Minister not to think that he believes that for one minute. It was not sensible of him to say that: to use his term, it is clearly "guff". If the Government cannot trust the people, they should at least consult them. New clause 8 would require proposals to be gathered from representative bodies, business and professional organisations, trades unions, Churches, local authorities and political parties. It would then require the boundary committee to comment on those proposals and to make recommendations to the Secretary of State, having regard to the objectives that regions should be of approximately equal size, where possible, and that the identities and interests of local communities should be respected.

Joyce Quin: rose—

Philip Hammond: I shall not give way, because I am conscious that we are rapidly running out of time and that many other hon. Members wish to contribute to the debate.
	I recognise that there is a tension between size and cultural identity, but it is not irresolvable. The second step introduced by new clause 3 is that regions defined under new clause 8, with a draft order produced, should then be put out to consultation with the people in an England-wide referendum. And before the Minister picks me up on it, that referendum includes London, and why not? This is supposed to be an England-wide solution.
	The first step is that we ask people to become involved in defining what the boundaries of the region should be. The second is that we put in a referendum to the people of England essentially three questions: "Do you support the proposals for the creation of regions in England, as proposed by the Secretary of State?"—in other words, the regional boundaries that are proposed; "Do you support the idea of referendums for elected regional assemblies in those boundaries in areas where there is sufficient interest?"; and, as a separate question, "Do you support the idea of reorganising local government in those areas that go for elected regional assemblies?"—in other words, an element of decoupling of those questions.

John Pugh: If for example, with regard to the first question, people vote for the creation of regions, but on the second question they vote against the reorganisation of local government, is the hon. Gentleman tacitly suggesting that the Conservatives would then support, responding to the people, a four-tier structure?

Philip Hammond: If the hon. Gentleman had contained himself for a moment he would have heard me say that if there is a strong yes vote on the first two questions and a strong no vote on the third question, the Government will have to think very hard about their compulsory linking of unitarisation with elected regional assemblies. It is a messy business, but that is democracy. There is a need for a wide test of opinion on all three questions.
	The Government try to insist that questions can be put on a strictly regional basis, but that is not correct. Post the United Kingdom devolution settlement, post the London government settlement, there is a need for an English settlement, which has to work for all of England. A solution that appeals perhaps only to one or two regions, or one that is built upon the sand of incoherent and unloved artificial regions, is not such a solution. New clause 3 gives a proper opportunity to test opinion England wide. It is more important to get it right than to get it quickly.
	I shall very briefly touch on the other new clauses and amendments.
	New clause 4 has been tabled specifically to allow an opportunity to discuss issues that were raised in previous debates about whether matters that are not proper are currently going on, in particular in relation to the north-west regional chamber. I shall leave it to other hon. Members, perhaps from that part of the country, to address that issue. The Minister was asked to look into the matter, and he says that he has. This morning he sent out copies of letters that he has sent to the relevant people in the north-west region reminding them of their obligations. But I had hoped to hear from the Minister today whether he had made any investigation of whether any of the matters that have already occurred are improper and represent spending that is not properly authorised for that purpose. New clause 4 would require the Secretary of State to satisfy himself that there is no improper behaviour going on within the regional structure before a referendum can be called.
	New clause 6 was tabled by the Liberal Democrats. I regard it as the economy version of new clause 8. Having saved their money, or their drafting time, with the economy version of the new clause, they then splashed out on the bolt-on added extra of the Cornwall option. There is no provision for consultation. There is no process. There is just an order-making power for the Secretary of State. The only place that is protected is Cornwall, which would then on the face of the Bill be defined as a region. No doubt the hon. Member for St. Ives will tell us why that is so.
	Amendment No. 2 provides that there shall be no regional referendum under clause 1 unless the England-wide referendum under new clause 3 has been held, and of course no England-wide referendum under new clause 3 can be held until the regional boundary-setting process under new clause 8 has been gone for.
	That would take a little longer, but it would ensure that what the Government hope to build is at least built on durable foundations.
	I must touch on amendment No. 26, tabled by the Liberal Democrats, before I finish. Clause 12 provides for a local government review, and the Government's intention is to require an all-unitary solution in areas that opt for elected regional assemblies. The Government's clearly stated intention is to publish the recommendations of that local government review before a referendum takes place, so that electors will be fully aware of the intended reorganisation of local government in their areas.
	Amendment No. 26 quite shamefully seeks to postpone the review until after the referendum. The precondition that requires a review under clause 12 to have taken place would be replaced by a requirement only for the Secretary of State to have instructed the boundary committee to be prepared for that review.
	So the Liberal Democrats, whose rhetoric is about transparency in government, have demonstrated by that amendment that the reality is that, when the truth will hurt their cause, they want to conceal it and suppress the boundary review process until after the referendum has taken place. That is typically inconsistent because new clause 7—also tabled by the Liberal Democrats—addresses what we call the pig-in-the-poke problem by deferring the implementation of the legislation until the power of elected regional assemblies has been set down in statute. [Interrupted]
	I hope that I did not hear the hon. Member for Kingston and Surbiton (Mr. Davey) say that I was deliberately misleading the House. Perhaps he would like to stand up and say that. If he reads amendment No. 26 very carefully, he will find out precisely what it does: it seeks to postpone the holding of the local government boundary committee review until after the referendum, so that electors who vote in the referendum will not know the changes that the boundary committee will propose to local government in their area when they vote. They will have been deceived.
	I shall soon conclude my remarks because of the pressure of time. This group of amendments addresses some of the most serious weaknesses in the Bill. It proposes consultation on the appropriate definition of regions, and it provides for a referendum when the division of England into regions is known, and for a test of England-wide public opinion. It would introduce a proper test of appetite for an imposed local government reorganisation. I strongly recommend to the House the amendments and new clauses that stand in the name of my right hon. and hon. Friends and myself.

Graham Stringer: I should like to make one thing clear in response to the speech made by the Conservative spokesman. I voted for the Bill on Second Reading because of the Labour party manifesto commitment to give people a choice about whether or not they wanted elected regional assemblies. I have become persuaded that the detail of the Bill will not deliver what it is supposed to deliver, so it would be wrong to deny people the right to vote against having an assembly.
	If the Deputy Prime Minister reaches the judgment that people in the north-west have sufficient interest and they are given the right to participate in a referendum, I hope to persuade them to vote against having an assembly. The reason for that is that this paving Bill has been wrapped up by those who support it with the view that it will somehow solve the West Lothian problem, that it will tackle regional disparities and that it will deal with the democratic deficit that those of us who live in the regions believe exists. We do not have enough say in many of the public bodies that deliver our services.
	I came to believe, as we considered the Bill clause by clause in Committee, that it will not do what was outlined in the White Paper. I also do not believe the argument that there is a great deal of desire for it in my part of the world, the north-west. I share the view that the north-west is a recent fiction of the television companies. We can solve the conundrum that was posed by my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman), who rightly commented that MORI polls and surveys conducted by the BBC give different results from those conducted by Granada. If people are asked whether they want more democracy and more say in things, by and large they say yes. That is especially so if one puts it in the context of the years of Conservative Government during which people in the north-east, the north-west and Yorkshire—indeed, most of the regions—were deeply resentful. People will then say, "Yes, we want less of that and more control over our own lives." To put it in a different context—this would be true in the case of Manchester or Liverpool—if people are asked whether they want more bureaucracy, more politicians, elected regional assemblies whose members represent constituencies of a quarter of a million people, or a loss of power from local authorities, they give a completely different answer.

Louise Ellman: Does my hon. Friend accept that the proposals in the Bill are not about removing powers from local authorities, but about democratising the powers that exist in an unelected manner in the regions? In particular, they deal with accountability for regional development agencies, housing investment, heritage, sports and cultural funding, and many other areas in which regional decisions are taken on a north-west basis without elected accountability.

Graham Stringer: The answer to that depends on one's historical understanding of where the money that funds the regional development agencies comes from. Much of the money that used to be in the urban programme was given to the Housing Corporation and to English Partnerships and has now appeared in the regional development agencies. We are dealing with a historical process that has taken resources from the local level and put them much further up. I do not accept the basis of my hon. Friend's position.
	My right hon. Friend the Deputy Prime Minister, like my hon. Friend the Member for Liverpool, Riverside, has a long history of supporting regional government. There is a debate to be had, and we are having it. It is certainly necessary to take some control away from the centre and to democratise many public services. However, I am deeply suspicious, given our debates in Committee and on Second Reading, because the Bill proposes unique mechanisms that, as far as I am aware, do not exist anywhere else. When the Government rightly proposed that city and district councils should have the right to decide whether they wanted an elected mayor, the electorate were given the right to campaign and petition for a referendum on that. In other instances of changes in the democratic structures, the Government have stipulated the right way to do it and imposed it. I may be wrong—one's knowledge is not always complete in such matters—but I cannot think of a precedent whereby the decision on whether to have a referendum about a regional assembly is dependent on the subjective judgment of my right hon. Friend the Deputy Prime Minister. When challenged in Committee, my right hon. and hon. Friends on the Front Bench were unable to give any indication of what the subjective opinion of the Deputy Prime Minister would be when he came to consider whether there was indeed sufficient interest.
	When we looked at the document that was being sent out to various bodies to get information from them, we noticed that question 7 asked respondents to give not only their own subjective impression but their subjective impression of whether other people were interested. As a basis for changing the structure and seeing whether there is an interest, that is entering the land of fantasy. As I said in Committee, given my right hon. Friend the Deputy Prime Minister's commitment to this matter, the only real test that the Government will use is whether, in a particular circumstance, that referendum will be winnable.

Kevan Jones: I understand my hon. Friend's position, and I understand that some people in all regions, including the north-east, are vehemently against elected regional assemblies. But is it not a fact that the Bill will give local people the say in whether they want a regional assembly? It will not be down to the Deputy Prime Minister, or any Minister. It will be down to the people. What is he afraid of in relation to people being given a choice about whether they want an elected regional assembly?

Graham Stringer: My hon. Friend has misunderstood what I was saying and what is in the Bill. People in the north-east and the north-west will not be given the right to say whether they want a regional assembly if my right hon. Friend the Deputy Prime Minister does not think they are interested enough. The Deputy Prime Minister will have the right to say whether they have that right. My point was simply that the people of the north-east or the north-west should be able to petition to have that right to vote. I hope that my hon. Friend will agree with me on that point.
	The hon. Member for Runnymede and Weybridge (Mr. Hammond) said that it was a debate in Committee that led him to present new clause 4. That is what has led to my suspicion that my right hon. Friend the Deputy Prime Minister wants elected regional assemblies. We have a regional assembly: should that body funded by the Government and by local authorities be allowed to spend that public money to campaign and work for what is clearly a political end and a matter of political dispute between the parties and within the parties?
	My right hon. Friend the Minister for Local Government and the Regions has sent a letter to me and other members of the Committee saying that he has reiterated the legal position to those bodies: unless they are spending private sector money, they cannot campaign on those issues. I shall read just two sentences from the letter printed in the Manchester Evening News on 6 December 2002 from the chief executive of the north-west regional assembly. He said that
	"it is essential for the future prosperity of Manchester and the whole of the north west that the region has the chance to elect its own regional assembly."
	Some of my hon. Friends will agree with that, but it is clearly a political campaigning statement. The same applies to the following:
	"The north west needs to be one of the first regions to hold a referendum and gain our regional voice."
	That is something that one hears within the Labour party, but it is not the role of the chief executive of the north-west regional assembly to voice that. Presenting the information is one thing; campaigning is another. I do not know whether private funds have been given to the chief executive to use facilities to put that out in his name and the north-west regional assembly's name. I hope, however, that my right hon. Friend is sufficiently concerned to find out whether Government or public sector money has been used for campaigning.
	Ministers are convinced that the north-east and the north-west should have elected regional assemblies. I think that there are other political priorities. It was a mistake for Ministers, in their Labour party capacity, to say that resources from the Labour party office should be devoted to winning this campaign. I would not want to overestimate the problem, but there is a threat from the British National party in parts of Lancashire. Our campaigning efforts would be better directed at that.
	I shall conclude my remarks, as I know that many other Members wish to speak. The need for devolution exists but, unfortunately, the mechanisms in the Bill will not lead to its achievement.

Edward Davey: It is right that the House should focus on the two key issues: the definitions and boundaries of the regions and the fact that the local government reviews, which the Government seek to link with the referendums on the regions, should be decoupled from them. People outside the House recognise that the Bill requires amendment in both regards.Liberal Democrats have led the opposition on the two issues from the start, and I am pleased that the Conservatives have realised, after the proceedings in Committee, that they are the two key issues and have woken up to that fact. Although the hon. Member for Runnymede and Weybridge (Mr. Hammond) took 30 minutes to make his points, I am delighted that he has recognised that the Liberal Democrats' agenda for opposition to the Bill is the right one.
	Decoupling the local government review from the referendums is one of the key issues, and the hon. Gentleman said that Liberal Democrat amendment No. 26, which would achieve that aim, is wrong and would not allow democracy to prevail. However, it has been our policy for a long time—we have a policy; the Conservatives do not—that the regional assemblies should decide the review of local government in their region. That is the democratic way. We have tabled amendments and, although some of them have not been selected, the hon. Gentleman can read the amendment paper and see them for himself. The fact that he dealt with the Liberal Democrat case by ignoring those amendments does him no credit.

Philip Hammond: Will the hon. Gentleman give way?

Edward Davey: The hon. Gentleman hogged enough time, so I will not give way to him on this point.With your leave, Mr. Deputy Speaker, I will seek to divide the House on amendment No. 26 because it is so important.

Joyce Quin: I, too, have expressed my support all along for decoupling. Although I support the idea behind the hon. Gentleman's amendment, I do not believe that it is necessary for the regional assembly then to address the issue. Regional government and local government are entirely separate and I regret the fact that there is confusion between the two in the Bill. I am keen for there to be no confusion, so I rather regret the fact that the hon. Gentleman has formulated his amendment as he has.

Edward Davey: I accept the right hon. Lady's point. It is not the ideal formulation, and the amendments that we tabled in Committee did not take this form. However, we are trying to reach a compromise with the Government. If they are worried, we have tried to make it clear that the referendum could assure the people that the regional assemblies would consider their concerns about there being too many authorities below the regional level. If the Government had accepted the principle in the amendments that were unfortunately not selected, they would have enabled that process to take place.
	I accept that the current amendment is a compromise, but I hope that the Government will accept it, as it would help the referendums to be won. If we could argue to the people who are concerned about too many tiers of government that the regional assembly would, after it was elected, consider that point without prejudging the issue, some of those understandable concerns might be allayed. I know that my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) feels strongly about that point, as do many of my right hon. and hon. Friends. They want people to have the choice about the structure of local government in their regions. They want the regional assemblies to give them that choice.

Gary Streeter: The hon. Gentleman has completely misunderstood the comments of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) to whom he will not now give way. We are not at all in favour of allowing elected regional assemblies to decide on the local government review. We have suggested an additional question so that the voters themselves can have their say. That is very different from the hon. Gentleman's proposal.

Edward Davey: I think that the hon. Gentleman misunderstands me. We want the regional assemblies to consider the proposals made by the boundary committee for England and to put them before the people so that they can vote on them. So the regional assembly would consider them, which is a more devolved approach, and the people would have a choice.

Philip Hammond: Will the hon. Gentleman give way?

Edward Davey: No, I want to make progress.
	It is vital to decouple the two issues. I hope that the other place will take that seriously and Members of all parties will co-operate to ensure that the decoupling works. It makes sense in terms not only of democracy, but of ensuring that the agenda goes ahead.
	The second key issue is regional boundaries. New clauses 8 and 6 and amendment No. 15 deal with that in different ways. None of them is perfect, but they offer options. If the Minister is convinced by our argument, I hope that he accepts one of them, although my guess is that he will not. An important issue is at stake, as I think the Minister knows in his heart of hearts. Some regions, such as the north-east, the north-west and Yorkshire and Humber, will have boundaries that are accepted in general. There may be a few complaints about them, as we heard from one or two hon. Members in Committee and today, but that is the case in general for those three regions. However, in other parts of the country there is much debate and concern about the regional boundaries established by the Regional Development Agencies Act 1998, to which the Bill relates.
	As the hon. Member for Runnymede and Weybridge said, we should not accept some regions, such as the south-east. They are far too large. People do not identify with them and the boundaries need to be reviewed. I think that that is the case for all the regions except the three that I identified.

Andrew George: My hon. Friend says that, in his heart of hearts, the Minister understands the conundrums that the Government will face when their zones are unacceptable to the people in their so-called regions. We are not attacking the Government, but advising them. Does my hon. Friend share my fear that the Government will find themselves in a straitjacket? They need to return to chapter 6 of the White Paper and recognise the need for flexibility when considering the future of the boundaries.

Edward Davey: My hon. Friend is right. A series of events will take place. Referendums will be held in the north-east, north-west and Yorkshire and Humber. I hope that those are won and regional assemblies are established there. I predict that a future Government will then ask for a review of the regional boundaries of the remaining English regions. They will have to do that because none of the referendums in the other regions is likely to be won unless they do. People who are strongly committed to regional devolution will be unable to bring themselves to support the campaign because they cannot support a region called the south-east of England.
	It would be much better for the Government to admit that and allow the Bill to contain a review of regional boundaries, even if it excludes the three regions with boundaries that I believe are acceptable to the people in those areas. That would enable the referendums in the north-east, north-west and Yorkshire and Humber to go ahead so that we do not stop the movement for regional devolution. It would also allow us to put right the problems in the rest of England.

Joyce Quin: Given what the hon. Gentleman has said, does he agree that the argument made by the hon. Member for Runnymede and Weybridge (Mr. Hammond), which was basically that because the north-east was smaller than any other region, it should have to wait until every other region, including the south-east, was happy with its boundaries before being allowed to have a regional assembly, was utterly preposterous?

Edward Davey: The hon. Lady is right; it was preposterous. The problem for the Conservatives is that because they do not believe in regional devolution, they have no policies—they do not know what else to do. They would be happy to keep the quango state. They support regional government but just do not like any democracy in it. That is why their position is untenable.
	I am keen to hear from the Minister in reply to this debate and to give him sufficient time in which to do so, so I shall quickly refer to the other amendments. Although I have some sympathy with the intention of new clause 3, it is fatally flawed because it would prevent a variable geometry—different regions going at different speeds. New clause 4 has something to recommend it. I would be worried about illegal expenditure by the RDAs or other public bodies before the referendums. I certainly oppose amendment No. 2, which is a surrogate turnout threshold amendment. We have had that debate.
	The key issues before the House—we will presumably get a chance at least to vote on the decoupling issue raised in new clause 3 and, hopefully, amendment No. 26—are decoupling the local government review and the regional boundaries. If the Government gave way on those two issues, they would have an awful lot more support both in the House and throughout the country.

Nick Raynsford: This is a complex group of amendments, I shall try to address all the new clauses and to respond as well as I can to the issues that have been raised.
	New clause 3 enables the Secretary of State to hold a national referendum across England, including London, which would ask two separate questions. One would be on whether people supported the proposals for the creation of regions and the subsequent holding of regional referendums. The second would be on whether people supported the idea of reorganising local government into unitary authorities where an assembly is created. Amendment No. 2 would mean that no regional referendum about elected regional assemblies could be held until a national referendum had been held.
	I am interested in the approach of the hon. Member for Runnymede and Weybridge (Mr. Hammond) to the people of London in these and other changes that the Conservatives have proposed. New clause 3 would give Londoners a vote on whether they were supportive of holding referendums about elected regional assemblies elsewhere in England despite the fact that there is no intention that London itself should have an assembly. It already has its own elected city-wide authority following a referendum in which the people of London voted yes. According to the Conservative party, the people of London would be asked to vote again even though, as I understand it, the Opposition have no intention of in any way changing any of the existing institutions in London. What a preposterous waste of time and money.
	New clause 3 would also give Londoners a vote on whether they supported the idea of restructuring local government in two-tier areas—despite the fact that London already has wholly unitary local government. So, that proposal makes no sense at all. Under new clause 8, however, London would be specifically excluded from making proposals for changes in regional boundaries despite the fact that neighbouring local authorities outside London could do so. That illustrates the total incoherence, incompetence and inconsistency of the Opposition's approach. It tells us that new clause 3 has no serious or useful purpose. It is simply part of the official Opposition's ill-thought-out tactics to use any means to try to deliver referendums on whether to establish elected regional assemblies.
	The Conservatives have made their opposition to regional assemblies clear; the hon. Gentleman stated it again this afternoon. As he will hear later, his noble Friend Lord Strathclyde made a scandalous statement yesterday in the House of Lords implying that the Conservative party in the other place would entirely ignore the views of this democratically elected House and try to stop the Bill becoming law. That comes from a party which accused us of arrogance, yet its unelected friends in the House of Lords are trying to dictate to this House which Bills should become law. That is a very dangerous challenge to our constitution, and I hope that the hon. Gentleman, who has made some disparaging remarks about the Government this afternoon, will immediately condemn his noble Friend's outrageous position.

Philip Hammond: While the Minister is talking about the unelected and unrepresentative upper House can he confirm that it is now Government policy that the upper House should be wholly elected?

Nick Raynsford: I put to the hon. Gentleman, who has no elected friends in the Chamber at all, to consider the right of Lord Strathclyde, a Member of the unelected House of Lords, to make the following point in a shameful speech last night:
	"I have something to say to the noble Lord the Government Chief Whip as a word of advice and perhaps even a warning, based on what I have heard of the view of most Members of this House about the general awfulness of elections. His regional assemblies Bill? No chance."—[Official Report, House of Lords, 22 January 2003; Vol. 643, c. 826.]
	How deplorable that an unelected House should tell the Commons what legislation should come through and that a Member of the Lords should refer to the "awfulness of elections". I hope that the hon. Gentleman will condemn that deplorable abuse of Conservative powers in the House of Lords.

Louise Ellman: Does my right hon. Friend agree that the comments that he has just quoted are easy to equate with an Opposition whose Members cannot be bothered to attend this important debate and who, when in government, set up regional Government offices, clearly with the intention of wielding power in the regions without accountability to the people of the regions?

Mr. Deputy Speaker: Order. Before the Minister answers, time is short, so perhaps we ought to get back to the new clause.

Nick Raynsford: Of course I shall do so, Mr. Deputy Speaker, while concurring entirely with the views expressed by my hon. Friend.
	Thinking about the effect of the Conservative amendments, we would have a long debate on regional boundaries under new clause 8 and amendment No. 3. New Clause 8 would insert into the Bill a procedure for creating new regions. It would involve submissions by local authorities and other "relevant interests" on proposed new regions, after which the Electoral Commission would submit another set of proposals to the Secretary of State. Presumably, there would be a consultation, but that is not explicit in the amendment. An order would then have to be made creating new regions.
	The Opposition replaced new clause 1 with new clause 8 so that they could include a provision excluding Londoners from the invitation to make proposals for regional boundaries. As I have already suggested, that is nonsense, as it would be open to people outside London to suggest changes to London's boundaries, but Londoners could not even make a proposal that London's boundaries should remain unchanged—how typical of the Opposition's incoherence. The process set out in new clause 8 could take years, given the resource implications for the Electoral Commission and the lengthy consultation that is envisaged. The consultation proposed by the Opposition would be time-consuming, expensive and unproductive. It would also, on the basis of past experience, be divisive and acrimonious, as most boundary disputes are.
	That brings me to new clause 6, which was tabled by the Cornish enclave of the Liberal Democrat party. It would enable the Secretary of State by order to define a region for the purposes of the Bill, and would uniquely oblige him to define Cornwall as a region—another ill thought out proposal. In every other part of the country, the Secretary of State would have freedom to define regions. That curious aspect of the new clause probably explains why the hon. Member for Kingston and Surbiton (Mr. Davey) did not put his name to it. It gives the Secretary of State extraordinary power to define regions everywhere else in the country—not, I think, Liberal Democrat policy—while requiring him to define Cornwall as a region.

Andrew George: The Minister well knows that the new clause is a probing measure as I have spoken to him about it. If the Conservatives had not spent quite as much time debating the management of time we would have had a chance to debate the issue. There are important issues about the size of regions. The Minister knows that it is not the size of the Cornwall region that is problematic, but the fact that it is politically inconvenient for him.

Nick Raynsford: I accept entirely the strength of feeling in Cornwall about its historical cultural identity. We understand that very much—indeed, we supported the campaign for the recognition of the Cornish language in which the hon. Gentleman was strongly involved. We were happy to accede because it is right for Cornwall's unique cultural heritage to be respected and preserved, but that is a very different proposition from the designation of Cornwall as a region. Regions are an intermediate tier of Government between the national and local level. A significant number of functions are currently discharged at regional level, such as economic development and planning. To be effective, such arrangements must operate on a large enough scale, and must be properly differentiated from the functions of local government, which should continue to be discharged at a local level. That, we believe, is the right way forward for Cornwall—to benefit from its membership of the wider south-west region in terms of planning, transportation and economic development, while preserving and enhancing its unique qualities through the work of its local authorities, and in particular through Cornwall county council, whose excellent performance was recently recognised by the comprehensive performance assessment. In response to the new clause proposed by the hon. Member for St. Ives (Andrew George), I have to say, in words that will no doubt immediately be recognised by him, na wrav kammenn. That means no way, in Cornish.

Andrew George: Will the Minister give way?

Nick Raynsford: Briefly.

Andrew George: Ow dysky da, ha clapya da. He has learned well—

Mr. Deputy Speaker: Order. Any words that the House does not immediately understand must be repeated and translated immediately thereafter.

Andrew George: I was about to do so, Mr. Deputy Speaker. I said that the Minister had learned well and spoken well, and I am grateful. However, he will ultimately find that there is no way that the people of the Government's south-west zone will accept a region on that basis. He will have to revisit the issue. I urge him not to place a straitjacket around himself from which there is no escape.

Nick Raynsford: I am grateful to the hon. Gentleman. As I said before, we have not put a straitjacket around ourselves. In the White Paper we made it clear that there is an opportunity and flexibility to look again at regional boundaries in due course. We do not believe that that is appropriate at present. It would be divisive and would prevent progress towards establishing elected regional assemblies, but there is no straitjacket.
	I must make progress, as time is very short. New clause 4, although apparently a sensible proposition as the hon. Member for Runnymede and Weybridge proposed it, is unnecessary and unworkable, and appears to be designed, like so many other Opposition amendments, to wreck the Bill. It would make it impossible for the Secretary of State to begin the process of moving towards a referendum for elected regional assemblies if any individual in either of the organisations mentioned, over which the Secretary of State has no control, should, for whatever reason, step outside their powers in the 12 months prior to the moment when the referendum is to be ordered. It is clearly a wrecking proposal.
	Amendment No. 26 from the Liberal Democrats would remove the requirement for a local government review to be carried out by the Boundary Committee before an order causing a referendum was made. Rather, the committee will only have had to be directed to prepare to carry out a review. We believe that any local government review of a region should be carried out before a referendum on elected regional assemblies, so that voters are fully informed of the implications of a yes vote for local government in their region.
	We also believe strongly that three tiers of government would be too many. It must be a feature of regional government that where people vote for regional government, it should be against a clear understanding that there will be a unified tier of local government, in just the same way as there is in London, Scotland and Wales. That is the precedent. We think that it is right and that it should apply in the English regions, too.
	Finally, Government amendment No. 4 is a minor tidying amendment, designed to make it clear that it is by order that an order under clause 1(1) to cause a referendum to be held is varied or revoked. It therefore makes it clear that any order to vary or revoke a clause 1(1) order would also be subject to the provisions in clause 27, and that the affirmative resolution procedure would apply. I ask the House to support amendment No. 4 and to reject the other amendments.

Philip Hammond: The Minister often speaks of synthetic anger. We have seen a virtuoso display of synthetic anger from the master himself. He speaks of our amendments being wrecking amendments. They would not have been selected and they would not be on the amendment paper if they were wrecking amendments. They are sensible amendments. The Minister refers to the lack of attendance in the Chamber, on all sides. I tell him why there is a lack of attendance in the Chamber: his guillotine meant that hon. Members in all parts of the House saw that they stood no chance of being called in the debate and went off to do better things.
	I am disappointed that the Minister has not listened to our arguments and has rejected all proposals to make his own structure more robust and durable, but I cannot say that I am entirely surprised. I will ask my hon. Friends to vote in support of the new clause. I shall also ask you, Mr. Deputy Speaker, whether we can have a separate vote on new clause 8, and if Liberal amendment No. 26 is pressed to a separate Division, I shall ask my hon. Friends to oppose it on the grounds—
	It being Five o'clock, Mr. Deputy Speaker, put forthwith the Question already proposed from the Chair, pursuant to Orders [29 October 2002, 26 November 2002 and this day.]

Question put, That the clause be read a Second time:—
	The House divided: Ayes 120, Noes 334.

Question accordingly negatived.

New Clause 8
	 — 
	Regional Boundaries

'(1) Before making any order under Parts 1, 2 or 3 the Secretary of State shall—
	(a) invite all local authorities in England (except London) to submit to him proposals for the creation of regions for the purposes of this Act; and
	(b) invite such other persons and bodies as appear to him to represent relevant interests throughout England (except London) to submit to him proposals for the creation of regions for the purposes of this Act; and
	(c) upon receipt of submissions in response to paragraphs (a) and (b) invite the Electoral Commission to comment on the submissions and to make proposals to the Secretary of State for the creation of regions for the purposes of this Act having regard to—
	(i) the desirability of all regions being, in so far as is not incompatible with (ii) below, of approximately equal population size; and
	(ii) the need to reflect the identities and interests of local communities
	(d) publish the proposals made to him by the Electoral Commission under paragraph (c); and
	(e) make an order creating regions for the purposes of this Act, having regard to the proposals published under paragraph (d).
	(2) For the purposes of this section "relevant interests" means professional bodies, trades unions, voluntary organisations, faith groups, political parties, business organisations and community organisations.
	(3) For the purposes of subsection 1 paragraphs (a) and (b), the Secretary of State shall set out a timetable for the giving of responses to him.'.—[Mr. Hammond.]
	Brought up, and read the First time.
	Motion made, and Question put, That the clause be read a Second time:—
	The House divided: Ayes 159, Noes 295.

Question accordingly negatived.

Clause 1
	 — 
	Referendums

Amendment proposed: No.4, in page 2, line 16 [Clause 1], after 'may' insert 'by order'—[Mr. Raynsford.]

Clause 2
	 — 
	Referendum Question

Amendments proposed: No.5, in page 2, line 24 [Clause 2], after 'statement' insert
	'(in as nearly as may be the following form)'.
	No.6, in page 2, line 27 [Clause 2], leave out from second 'region' to end of line 33 and insert
	'If an elected assembly is to be established, it is intended that:
	the elected assembly would be responsible for a range of activities currently carried out mainly by central government bodies, including regional economic development; and
	local government would be reorganised into a single tier in those parts of the region that currently have both county and district councils. There would be no such reorganisation of other local authorities in the region.'.—[Mr. Raynsford.]

Clause 6
	 — 
	Combination Of Polls

Amendment proposed: No.7, in page 3, line 29 [Clause 6], after 'may' insert '—
	(a) make provision in connection with the combination of polls;
	(b) make provision for the creation of offences;
	(c)'. —[Mr. Raynsford.]

Clause 19
	 — 
	Advice Of The Electoral Commission

Amendments proposed: No.8, in page 10, line 33 [Clause 19], leave out
	'The Secretary of State may'
	and insert
	'Not later than the end of the period of two years beginning with the day on which the referendum was held the Secretary of State must'.
	No.9, in page 10, line 35 [Clause 19], leave out 'Such a direction may' and insert
	'A direction under subsection (2) must'.
	No.10, in page 10, line 36 [Clause 19], after 'to' insert
	'such of the following matters as the Secretary of State thinks appropriate'.
	No.11, in page 11, line 6 [Clause 19], leave out 'or revoked'.—[Mr. Raynsford.]
	Question put, That the amendments be made:—
	The House divided: Ayes 323, Noes 118.

Question accordingly agreed to.
	Order for Third Reading read.

Nick Raynsford: I beg to move, That the Bill be now read the Third time.
	We have had full and extensive debates on the Bill. We debated it on Second Reading and our extensive debates in Committee were widely recognised as being thorough and good tempered. Those debates were followed by a full day's consideration in the House on the first four clauses and now by the debates on Report.
	The Bill is in good shape, and it is right that we should now commend it to the other House, where I hope that it will receive a fair and impartial hearing on all sides. I also hope that Lord Strathclyde's sadly unhelpful comments, to which I referred in my speech on the last group of amendments, will not be indicative of the approach that the official Opposition will adopt in considering the Bill in the other place.
	The Bill takes forward the Government's manifesto commitment to provide for elected regional assemblies where the people in the regions want them.

George Howarth: My right hon. Friend is aware that I am opposed to the Bill in principle and that, as things stand, I would be inclined to vote against it on Third Reading. However, he is also aware that, if it were possible to develop new proposals for city-wide government in certain conurbations, I might look more favourably on the Bill. Can he give me any reason for hope about that?

Nick Raynsford: I know that my hon. Friend has reservations about the regional agenda, but the Government are committed to strengthening city government and ensuring that our big cities and towns have effective representation. We have already considered a range of constitutional changes, including directly electing mayors, and we will continue constructively to explore ways in which we can reinforce the ability of our cities and towns to achieve effective city government. I hope that my hon. Friend will want to engage in a constructive discussion about such issues and that he will feel able not to vote against the Bill tonight.
	The principle on which the Bill is based is choice, exercised democratically by the people through referendums in each of the English regions. The Bill is at the heart of our programme to modernise our constitution, decentralise power and deliver better public services.
	It is a crucial step towards establishing a democratic voice for the English regions—a voice that has been denied them for too long. We want to give the people of our regions the right to choose; the ability to decide what is best for them; a distinct political voice; a regional level of democracy; and, above all, greater control over regional issues that matter, such as economic development and regeneration, planning, housing, transport, health, culture and the environment. This is an important and exciting Bill and I commend it to the House.

Philip Hammond: Although I do not wish in any way to detract from the Minister's achievement in getting this Bill through, he has certainly not won all the arguments, including some with Members on his side of the House. He has had a pretty thankless task in piloting the Deputy Prime Minister's pet project through its parliamentary stages. The Bill is an ill-thought-out measure. It seems rushed and fatally flawed even to some of those who favour regional devolution on the Government's model: first, because it insists on using the inappropriate and irrelevant Government offices for the regions' boundaries to define the regions; and secondly, because it couples the issue of elected regional assemblies with the compulsory unitarisation of local government—on which, to be fair, Liberal Democrat Members have focused throughout the debate.
	Elected regional assemblies will create an extra tier of government in the unitary areas and the loss of county councils in most of the shire district areas. That is a high price to pay for assemblies that are based on regions with which, in most cases, people will have little or no natural affinity. The regional assemblies will bring additional burdens of cost—extra costs on council tax payers, extra costs on business in the form of higher rates, and extra costs through the bureaucracy involved in paying for the prestige buildings, salaries and cars that will be demanded.
	What powers will the assemblies have in exchange for all those extra costs? Of course, we do not know, because we have not seen a Bill that sets out their powers, and we have learned precious little from the White Paper and ministerial statements. They will have political control of the regional development agencies, but no additional money. They will have influence over central Government decisions and will be able to put forward strategic plans, but always within the context of a national framework and subject to the approval of the Government offices for the regions, which will be standing looking over their shoulders. They will have the planning functions that they have sucked up from county councils, which means that decision making will be more remote from, not closer to, local communities.
	Notwithstanding our disagreement with the principles behind the Bill, we proposed constructive solutions throughout its passage, but every one was rejected. Today, the Government have set their face against greater transparency by opposing a new clause that would have encouraged voters to understand the implications for local Government in their region of voting yes in a referendum. They have set their face against a process that would have allowed a building from the bottom up of regions that would have some meaning for the people who live in them—regions that people could respect and even come to love, rather than the irrelevant regions that the Government have chosen to run with. They have set their face against a referendum of all the people of England to test their appetite for elected regional assemblies and the local government reform that the Government insist must go with it.
	The Minister has got his Bill through this House, albeit without a proper debate, especially on the first four clauses, which are critical to the Bill, but were very time-limited in Committee. The Deputy Prime Minister has seen his pet project come to legislative fruition, but the Government cannot rely on procedure to avoid the real debate that will take place when the Bill reaches the other place. Because of the Government's approach—the rush, the refusal to compromise, the unwillingness to listen to the people and to create regions that have meaning and might stand a chance of winning the allegiance and affection of their inhabitants—they do not have a lasting and durable solution to the challenge of creating a model for decentralisation in England.

Jim Knight: I am a keen supporter of the Bill. I was pleased to sit on the Standing Committee that considered it, and I enjoyed the experience. The Bill is the precursor to regional government, which I very much support for four principal reasons.
	First, it will increase the accountability of the many regional bodies—quangos—particularly the regional development agencies, which have done some useful work in the south-west, although I have concerns about the boards being accountable through the Secretary of State but not directly accountable to us in our region.
	Secondly, regional government will provide a strategic view. The Planning and Compulsory Purchase Bill is currently going through Parliament, and the hon. Member for Runnymede and Weybridge (Mr. Hammond) alluded to the fact that regional assemblies would exercise some planning powers under it. I support that, as it is appropriate to have a strategic approach within which sub-regional groups may mirror counties in many cases and deny what the hon. Gentleman said about the sucking-up of powers. It will certainly join up a lot of thinking. My area is lucky enough to have world heritage status for our coast, which cuts across county boundaries. I look forward to a more strategic approach at a regional level to maximise the benefit of that status.

Louise Ellman: Does my hon. Friend agree that any suggestion that boundaries should be drawn around cities would mean the isolation of areas that are not within those boundaries, particularly rural areas, and would not deal with vital regional issues in relation to economic development, population movement and the work of the regional development agencies?

Jim Knight: I am interested by my hon. Friend's intervention, but I have no desire to get involved with the politics of the north-west in answering it. There are times when there is a clear relationship between a core and a periphery. That happens at a national and a regional level, and it can happen between a market town and its periphery. That may give some support to her without necessarily offending some of my other hon. Friends.
	The third reason why I support regional government is to provide a regional voice. Clearly, the north-east needs that voice. Even the south-west, however, with its rich diversity, has common strands of economic importance. We rely on agriculture, the defence industry and the tourism industry across the seven counties of the south-west. A clearer regional voice and set of thinking would be welcome.

Andrew Turner: Does the hon. Gentleman agree that my constituency has many similarities with his and with much of the west country? Will he comment on the Department for Transport's recent airports map, which put my constituency off the coast of his constituency rather than off the coast of the constituency of my hon. Friend the Member for New Forest, West (Mr. Swayne)?

Jim Knight: I have no desire to comment on a map that I have not seen. I enjoy viewing the Isle of Wight from my constituency when I am in Swanage, but I accept that, on the boundaries of regions, there are some who would like to be either side. I am sure that parts of Dorset would welcome the Isle of Wight coming home to us, along with its geology. I am content that we should proceed on the basis of the boundaries that we currently have for our regions, because that means that we can have regional government all the more quickly. In addition, the south-west has some common problems, such as our transport infrastructure and a lack of affordable housing, which, equally, a regional government could address.
	Finally, we need to resolve what is called the West Lothian question. We have seen the start of devolution in London with the Greater London Authority. We need to continue the process by developing regional government for England. I support the Bill and the fact that it is not imposing regional government on any region, as the electorate will be able to vote for it. It is not an addition of Government in most cases, and certainly not in the south-west, where we can see the unification of local authorities and strong parish councils, as I have argued throughout this debate.
	I want to allow other Members to speak, as many want to do so in the limited amount of time available. I urge hon. Members to support the Bill, and I look forward to future legislation to finish off the job of the White Paper and resolve that important West Lothian question.

Edward Davey: There is a strong case for elected regional assemblies. The Liberal Democrats have advocated regional devolution for many decades, and it is a real pleasure to see that the Government are, at long last, beginning to take on that agenda.
	One argument for regional assemblies is based on the democratisation of the regional government that already exists. The hon. Member for South Dorset (Jim Knight) has made some of the arguments for democratising the quango state that was bequeathed to Britain particularly by the previous Conservative Government. The value of democratising the regional government that exists is that we could, I hope, push for better value for money. Many of these bureaucracies have overlapping responsibilities, vast offices, many chief executives and so on. Much of that can be rationalised in the new regional assembly process. We look forward to that happening and we encourage the Government to go further than they have.
	There are three major problems with the Bill. I touched on the first earlier today. The fact that the local government review is coupled with the regional referendums is a big mistake, and the Government will rue the day that they coupled the two. The second major problem relates to the fact that the Government have not allowed for a review of the regional boundaries. In responding to my hon. Friend the Member for St. Ives (Andrew George), the Minister said that there might be reviews of regional boundaries in due course. I hope that that will be sooner rather than later, and it will have to take place before there are referendums in regions outside the north-east, the north-west, Yorkshire and Humber.
	The third major problem with the Bill is that it will allow referendums to go ahead without the electors knowing what powers the regional assemblies that they are being asked to vote for would have. That is a mistake. The Minister has cited the precedents in Scotland and Wales, but the Welsh vote was almost lost. One of the arguments used against the creation of the Welsh Assembly was that its powers were not set out clearly enough.

Llew Smith: Will the hon. Gentleman give way?

Edward Davey: I will not give way, because time is tight. It would have made much more sense if the Government had reassured us that they intended to introduce legislation, even in draft form, before the first referendum on a regional assembly took place.
	On Third Reading, we have to ask whether the glass is half full or half empty. Our view is that it is important that the cause of regional devolution gets going and that we start a process that has been long awaited. Despite the many flaws in the Bill, we will view the glass as half full and we will vote for its Third Reading. Although the Minister was right to draw attention to the words of Lord Strathclyde last night and to say they were not appropriate, I hope that he will admit that it is the duty of the other place to scrutinise legislation.

Nick Raynsford: Not to stop it.

Edward Davey: Not to stop it—the Minister makes a valid point. I hope that noble Lords on all sides will work to amend the Bill in the way that some of us tried to do in Committee.

Andrew George: I want to put on the record that, although I agree with everything that my hon. Friend has said, I am afraid that I have reached a different conclusion. I believe that the glass is half empty. I agree with his analysis and will not try to stop the Bill, but I will not vote for it. I will abstain and I am sorry about that, but much more work needs to be done before it is palatable to us.

Edward Davey: I certainly understand why my hon. Friend has come to that conclusion. Many of us have had to think very hard about whether we would vote for the Bill because of the many problems in it. I understand why he wishes to take that action, but I urge my other hon. Friends to give the Bill its Third Reading, so that we can move on with regional devolution. The Bill will then move to another place where I hope it will be amended properly.

Joyce Quin: I warmly welcome the Bill and I am glad that it is completing its proceedings in the Commons.
	I wish to make two points. First, in parallel with the Bill and complementary to it, the Government are undertaking a soundings exercise to try to find out how keen people in the regions are on holding referendums.
	I urge my right hon. Friend and his ministerial colleagues across the Government to give publicity to that. Many other issues understandably dominate the news, but I am keen that people in the regions understand and appreciate what is on offer.
	My second point is that devolution has been a success so far, although it has thrown up interesting variations in policy, including enlightened approaches to nursing care, concessions for elderly travel and the establishment of children's commissioners. Although I encourage the Government to devolve functions to the regions of England, I also encourage them to consider some of those enlightened policies for England as a whole because many of them would be of great benefit.
	Having said that, I wish the Bill every success in its passage through the other place. I certainly hope that it does not attempt to block it. The Bill is a manifesto commitment and it would be constitutionally unacceptable for it to do so. I wish the Bill every success and hope that regional assemblies will be successfully established, especially in my region of the north-east. 5.55 pm

Gary Streeter: The Bill is destined to join a growing list of half-baked and ill-thought-out new Labour legislation that has been put on the statute book since 1997. It introduces regional government on a piecemeal dyslexic basis, which will produce an asymmetric and unsustainable constitutional settlement for this great country. It introduces a system of taking soundings on the level of interest in a region which is so vague as to be utterly meaningless. The Deputy Prime Minister may as well open a window in Whitehall and stick his finger in the wind.
	The Bill introduces referendums with no thresholds, so even a tiny number of anorak-clad voters can effect constitutional change with no recall and no recourse if mistakes are made. It does not define the functions, powers and responsibilities of the new elected assemblies, and will be a recipe for confusion. It fails to give sufficient information to enable electors to make an informed decision. The Bill locks itself into regions that make no sense whatsoever—

Hilton Dawson: Will the hon. Gentleman give way?

Gary Streeter: No, there is no time. The hon. Gentleman has just entered the Chamber; I have been here all day.
	The Bill locks itself into regions that do not attract local affinity or a sense of identity. How can it be right that Tewkesbury is in the south-west region when it is closer to Scotland than it is to Penzance?
	The Bill ushers in a massive and unnecessary upheaval of local government and will almost certainly spell the death knell to historic county boroughs over vast swathes of the country. It will take decisions away from local people and give them to elected regional assemblies, which will be accountable to no one. It is a clumsy, inchoate and incoherent measure. It will not stand the test of time and we should oppose it.

Louise Ellman: I warmly welcome the Bill. It is a vital further step on the road to regional devolution advanced by the Government. Its purpose is to bring more power to the people in the regions, to narrow economic disparities and to stop the increasing flow of populations from the poorer north to the overheated south and south-east. It gives the voice of legitimacy to elected people in the regions to influence Government and European policy to benefit their economic development. It brings accountability to those decisions that are taken on a regional level and brings more focus to them.
	The Bill is of great importance to the country. It is of particular importance to the north-west and will be warmly welcomed in my constituency of Liverpool, Riverside. I look forward to it being put into practice and receiving support in the other place. It is a vital measure and I hope that it receives the full support of the House. 5.58 pm

Andrew Turner: As my hon. Friend the Member for South-West Devon (Mr. Streeter) said, this Bill is deeply defective—and for two reasons. First, however, I should like to deal with the point that the hon. Member for Liverpool, Riverside (Mrs. Ellman) has just made about the drift from north to south. It is extraordinary that she can criticise such a drift while at the same time supporting her Deputy Prime Minister's proposals to build houses all over the south of England to encourage people to drift from the north to the south. I find that incoherent.
	The first reason why the Bill is unacceptable is that the boundaries of the regions do not match people's aspirations. I say that as someone who represents a constituency right on the edge of the south-east region—as defined by the Government—which has far less in common with Ramsgate and Milton Keynes than with Bournemouth and Portland.
	The second reason is the West Lothian question. We must resolve the problem that issues that matter to Members who represent English constituencies, or in future to those who represent constituencies without a regional assembly, can be voted on by those—

It being Six o'clock, Mr. Deputy Speaker put forthwith the Question already proposed from the Chair, pursuant to Orders [29 October 2002 and 26 November 2002 and this day].
	The House divided: Ayes 331, Noes 123.

Question accordingly agreed to.
	Bill read the Third time, and passed.

Business of the House

Ordered,
	That, at the sitting on Thursday 30th January, proceedings on the Motion in the name of Mr Iain Duncan Smith shall lapse, if not previously concluded, at Six o'clock or three hours after they have been entered upon, whichever is the later; proceedings may continue, though opposed, after the moment of interruption; and the Orders of the House of 28th June 2001 and 29th October 2002 relating to deferred Divisions shall not apply to them.—[Mr. Heppell.]

Sittings in Westminster Hall

Ordered,
	That Sir Nicholas Winterton, Mr John McWilliam, Mr Frank Cook and Mr Edward O'Hara be appointed to act as additional Deputy Speakers at sittings in Westminster Hall during this Session.—[Mr. Heppell.]

notices of questions, motions and amendments

Ordered,
	That Standing Order No. 22 (Notices of questions, motions and amendments) be amended, by inserting, after 'Wales' in line 40, the words 'and the Advocate General'.—[Mr. Heppell.]

Scottish Grand Committee

Motion made, and Question put forthwith, pursuant to Standing Order No. 100 (Scottish Grand Committee (sittings)),
	That the Scottish Grand Committee shall meet at Westminster on Wednesday 12th February at half-past Two o'clock to consider a substantive Motion for the adjournment of the Committee, the proceedings to be interrupted at Five o'clock.—[Mr. Heppell.]
	Question agreed to.

Northern Ireland Grand Committee

Motion made, and Question put forthwith, pursuant to Standing Order No. 115(1) (Northern Ireland Grand Committee (delegated legislation)),
	That—
	(1) the draft Strategic Investment and Regeneration of Sites (Northern Ireland) Order 2003 be referred to the Northern Ireland Grand Committee;
	(2) the Committee shall meet at Westminster on Tuesday 4th February at half-past Two o'clock; and
	(3) at that sitting the Committee shall consider the instrument referred to it under paragraph (1) above.—[Mr. Heppell.]
	Question agreed to.

PETITION

Sentences

Andrew Rosindell: It is with great sadness that I rise to present a petition to the House on behalf of no less than 41,000 constituents of mine and of constituencies neighbouring Romford.
	On 14 December 2001 a tragic event took place in London road in my constituency, Romford, where Scott Young was punched in the face, fell into the path of a passing car and was tragically killed. His parents, Kim and Ray, their daughter Clare, the entire family and friends from around Romford and Havering have spent the past six months collecting 41,000 signatures from the local community.
	The people of my constituency are outraged that the person who perpetrated that wicked crime received only three years in prison. It is said that within a year he will be released on parole. The Home Secretary today met the parents of Scott Young, and I am pleased that he agreed to take up the case and see what else can be done to bring justice.
	The petition states:
	The petition of residents of Romford and the surrounding areas declares that the sentence given to Yannick Etutu for the manslaughter of Scott Young is entirely inappropriate and should have been much longer.
	The petitioners therefore request that the House of Commons urge the Secretary of State for Home Affairs to review this sentence and introduce legislation that will ensure more appropriate sentences for this type of crime in the future.
	And the petitioners remain etc.
	To lie upon the Table.

GARRETT (HONEYWELL INTERNATIONAL)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heppell.]

Colin Pickthall: I am extremely grateful for having been given the opportunity to discuss this matter with the Minister this evening. For the sake of the record, I want to correct the Order Paper's spelling of the name of the firm, Garrett, which might otherwise alarm workers in another firm.
	Just before Christmas, the parent company of Garrett in my constituency, Honeywell International of New Jersey, announced the factory's closure later this year. That ends the jobs of 350 directly employed and highly skilled workers in Skelmersdale. In the time that is available to me, I want to make clear to the Minister the nature of this economic and social tragedy in my constituency. I also wish briefly to comment on a wider issue that it illustrates all too clearly—the bloodless way in which multinational companies can operate and the part that they seem to be playing in stripping Britain of sizeable chunks of its manufacturing industry.
	Garrett manufactures turbochargers for passenger car diesel engines and commercial vehicle diesel engines. The firm is the centre of excellence for the manufacture of commercial vehicle turbochargers in Europe. It has operated in Skelmersdale for almost 30 years. Garrett is profitable and efficient, and it has a market. Some 70 per cent. of its production for passenger car turbochargers supplies the Dagenham engine plant. That amounts to a total of 500,000 turbochargers in 2002.
	The high quality of the product and the work force are acknowledged even by Honeywell International. The work force at the factory total 470. All the direct manufacturing jobs are to go, leaving design, testing and development personnel in Skelmersdale. Of course, I am very glad for them, however temporary that arrangement might prove—we do not know yet—but the fact that those jobs will remain scarcely moderates the scale of the disaster.
	Skelmersdale is a smallish town of 42,000 people and small and medium-sized firms. Garrett is the largest private sector employer in the town. Indeed, I believe that it is second only to the local authority out of all the employers in the town. It is also one of the highest paying firms, if not the highest paying. It is the firm that most workers and young people in the town have, for as long as I can remember, always aspired to get into. Of course, its reputation for training and skills training only exaggerated that bias among the work force.
	While unemployment in Skelmersdale has diminished vastly since 1997, it is still a lot higher than the national average, and the majority of jobs in the town are low paid and low skill.
	The end of manufacturing at Garrett is therefore a substantial psychological as well as economic catastrophe for the town. Why has it happened? The simple answer appears to be that Honeywell has made the decision because it can. Its central reason is that work will be moved to Romania because wages there are a fraction—an eighth—of those in the United Kingdom.
	Honeywell International has three plants in Europe: Thaon-les-Vosges in France, Atessa in Italy and Garrett in Skelmersdale. Its plan is to move the car turbocharger work from Skelmersdale to Atessa in the next six months. At the same time, a similar amount of work will move from the Atessa plant to the plant near Bucharest. The manufacture of commercial vehicle turbochargers from Skelmersdale will move straight to Romania later.
	The company has given other reasons apart from wages. It claims that there is overcapacity in Europe and that there is no sign of an upturn in demand for several years. It says that it therefore needs to reduce the number of plants. However, it is not doing that; it is simply moving the three around a little and opening another in Romania. It claims that the cost of closing the Skem plant is less than that of closing either the French or the Italian plants. Other multinational companies have presented such arguments and they have often been discussed in the Chamber.
	However, perhaps most chilling for us in government is the fact that Honeywell tells us that the customer and supply base is moving to eastern Europe. That means that car manufacturing and the manufacture of the appropriate components is moving slowly but surely towards eastern Europe.
	I am delighted that my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) is present. She lived in Skelmersdale for many years and was a distinguished representative on the county council and district council. She knows all the arguments from her many years in Skelmersdale.
	I have supplied the Minister's office with a copy of a paper that Amicus AEEU prepared. I am grateful to Harry Howard of AEEU and John Jones, the plant manager at Garrett, for the information that they prepared for me, and hence indirectly for the Minister. The company's documentation includes graphic illustration of the apparently inexorable move of car manufacturing and component supply eastwards to the low-pay areas of eastern Europe. I am sorry that I cannot read the map into Hansard, because it is so graphic.
	I have nothing against the development of Romania, and I wish that country well. After some years, Romanian wages and conditions of service may improve—I hope that they will—to match ours. Presumably car manufacturing and other branches of engineering will then start moving even further east. To some extent, that is already happening.
	In 2001, Ford at Dagenham applied pressure on the component manufacturers, including Garrett, that supplied its engine plant to relocate to the industrial park surrounding the Dagenham plant because of the express need to make the supply lines as short as possible. After the changes that I have described by Honeywell, the supply line will stretch 1,100 miles to Atessa or 1,500 miles to Bucharest.
	Garrett workers suspect—I put it no more strongly because they did not—that the apparently illogical move of the work to eastern Europe is part of what Honeywell describes as the migration of the car industry eastward.
	I have no knowledge of Ford's view of this development, but I would be very interested to hear it. I have alerted my hon. Friend the Member for Dagenham (Jon Cruddas) to the possible implications of Garrett's move for the Dagenham engine plant. Will Ford tolerate a 1,500-mile supply line for this component? Do not all passenger car manufacturers have a strategy of establishing industrial parks around their assembly plants, in which their component manufacturers will be concentrated? I concede that that makes both economic and environmental sense. I would not suggest for one moment that Ford would follow a component supplier to the other side of Europe. That would be a case of the tail wagging the dog. I suggest, however, that the eastward migration that I have described may eventually involve both.
	There may be many factors involved in such a migration of engineering and manufacturing, and this is the second engineering firm to move out from Skelmersdale to Romania in the last couple of years in almost precisely the same circumstances. Those factors include the level of the pound, the fact that we are outside the euro—a fact that Honeywell cited—and the comparative ease with which companies can close down plants in the UK, compared with the way in which obstacles are placed in the way of that in many of our European partner countries.
	I know that the scenario that I am describing is not uncommon in manufacturing industry across the north-west. Indeed, I am embarrassingly aware that the Minister and his colleagues in the DTI have rather more Adjournment debates, questions and deputations than they would like, and I am sorry to have to add to that number.
	In Skelmersdale, I represent a town with a long and painful history of unemployment and economic disadvantage, which crippled it during the Thatcher and Major years. Since 1997, thanks to its own strenuous efforts, substantial help from the Labour Government, and positive proaction from the county council and the district council, Skelmersdale's economy and, therefore, its community life have improved in a marvellous way. I am very proud of the part that the Labour Government and the Labour authorities have played in that.
	Through thick and thin—most of it thin, I have to say—Garrett has been a solid rock of skill and success in Skelmersdale. It is, therefore, bitterly ironic that in the generally auspicious circumstances that we now have, faceless men or women sitting in New Jersey should snuff out such a success story in a game of long-distance chess, by
	"seizing the opportunity to take cost out of our European operation",
	as the American representative of Honeywell who came to meet us said to me. I am desperately sorry for the Garrett work force and for those workers in the other firms—not only in my constituency—that supply Garrett, whose jobs will now also come under threat. I am also very angry that we, as a country and as a Government, seem so helpless in the face of these decisions. This is socio-economic crime, and attention must be paid to it.
	In summary, I want to put some questions to my hon. Friend the Minister. I am well aware of the restrictions on what he can do about them. First, what advice and help can the DTI offer to the work force and the management at Garrett in relation to combating the closure and coping with its consequences, if and when it happens? Will he be able to find the time to meet workers and management from the firm, or possibly even to talk to Honeywell? Secondly, what, if any, leverage can the DTI bring to bear on an international company such as Honeywell to make it think again on this export of jobs? Thirdly, what is the scale of the exporting of engineering and manufacturing from the UK to eastern Europe and, indeed, to the EU? Would it be possible to break that figure down for the north-west? Fourthly, will the Minister examine the fact that Garrett's move to Romania could have serious implications for Dagenham?
	If my hon. Friend cannot reply to, in particular, my third and fourth questions, I hope he will write to me at some point.
	As I have said, Garrett is not a weak or a struggling firm; quite the reverse. It is a firm of the highest quality, producing high-quality products, with a first-class work force. Its closure is not just a tragedy for Skelmersdale. It strikes me as a frightening portent of things to come.

Alan Johnson: I congratulate my hon. Friend the Member for West Lancashire (Mr. Pickthall) on securing this debate, and on describing so eloquently the effects that the closure of Garrett—the 90-day period has not ended yet, but the situation looks grim—is having in his constituency. I know how hard he has worked to try to find alternatives on behalf of his constituents.
	Garrett manufactures turbochargers for the automotive industry. Let me first say something about that industry, about Government support for it and about manufacturing more generally. I will then deal with the case raised by my hon. Friend. I hope to be able to answer most of the questions that he asked at the end of his speech.
	Following publication of the enterprise, innovation and skills White Paper in February 2001, the Department of Trade and Industry established the automotive innovation and growth team. It was chaired by Sir Ian Gibson, former chief executive of Nissan's UK and European operations. It consisted of a strategy team comprising trade unionists, industrialists and others who had been in the automotive industry almost all their lives, and several sub-groups. They would examine various issues such as design, development and manufacture, distribution, competition and the consumer, the environment, and technology.
	The team's report was published in May 2002. It contained seven recommendations relating to the future of our automotive industry over the next 20 years, all of which the Government accepted. We are committed to implementing the recommendations—many of which are relevant to the points raised by my hon. Friend—and we have allocated £45 million to the process. Following the report's publication, the DTI's automotive unit was restructured to focus on strong and effective relationships with key companies in the UK's automotive sector and on the team's recommendations. We are arranging to fund supply chain groups across the UK, as was announced at the Birmingham motor show on 22 October. Progress has also been made on implementing the other recommendations: that includes setting up an automotive academy and two centres of excellence, a pilot mobility services project and a retail motor strategy working group. Those initiatives reaffirm the Government's commitment to the automotive sector.
	I think it highly unlikely that Ford is preparing to end diesel production in Dagenham, although I will do as my hon. Friend asks and look into the ramifications as set out in Amicus's detailed and comprehensive report. Ford has only just invested £340 million as part of a programme to establish the UK as Ford's European diesel centre of excellence. I visited the site recently, and observed enormous excitement about the amount that Ford is investing.
	Garrett is in an assisted area and a European funding area, so there is scope for financial assistance. When companies experiencing difficulties, as is the case with Garrett, contact their local Government office—they must want our assistance in the first place—or regional development agency, they can expect advice and assistance relating to all the issues confronting them. Regional selective assistance, which is administered by the RDAs and which Garrett has received at least four times over the last 20 years, can be used to safeguard as well as create jobs when companies are in assisted areas. In the past three years in West Lancashire there have been nine offers of grants totalling £1.3 million, against a capital expenditure of £14.5 million, creating 355 jobs and safeguarding 79.
	As a Government, we have helped more than 3,000 businesses across the country, supported £6 billion of investment and ensured that 135,000 jobs, most of them in manufacturing, which attracts 96 per cent. of all regional selective assistance grants, were created or safeguarded. It is clear that there are measures available to persuade Garrett to retain a presence in Skelmersdale but obviously the final decision rests with the company.
	The level of assistance available to support companies, and Skelmersdale in the wider economic context, is considerable, and time after time we have succeeded. We must remember in this debate that it is not Romania, Hungary, Poland or the Czech Republic that attracts the most inward investment in Europe; it is the United Kingdom. We are second only to the United States in attracting inward investment, which is one of the reasons why—I will come to the specific problems of manufacturing in a second—last week's figures showed that, even though there is a global recession in manufacturing, we have the lowest unemployment in this country and the highest employment for 30 years.
	In addition to having assisted area status, Skelmersdale is supported by objective 2 money, and under objective 2 priority 1, assistance is available to meet the specific needs of small and medium-sized companies. Operating under two action plans, the north and west Lancashire partnerships and the Northwest Development Agency plans have been awarded more than £40 million to date.
	Financial assistance is an important means of support but the full range of regional and national support is much wider. Representatives from the north-west automotive sector have met on a number of occasions to discuss the possibility of setting up a north-west automotive group. The Northwest Development Agency has completed an automotive sector study seeking to take forward the findings.
	We have invested £15 million in a new manufacturing advisory service to spread best practice. The Northwest Development Agency appointed the Manufacturing Institute as the regional centre of manufacturing excellence, designed to provide a range of support measures to help companies to develop "lean" manufacturing processes and to act as a one-stop shop, providing advice particularly to companies in the supply chain.
	The Northwest Development Agency also delivers the supply chain programme, which helps and encourages north-west businesses to use north-west suppliers as well as assisting small businesses to devise recovery plans should their main customer reduce production or move from the area.
	I turn to the substantive issue. I was extremely sorry to hear the announcement by Garrett of its plans to close the plant in Skelmersdale. As my hon. Friend said, as many as 350 jobs are to be lost, with consequential negative effects, no doubt, both locally and further afield. The effects will be devastating for staff and their families.
	I understand that the company has given a guarantee that no one will be forced to leave before 1 May 2003 and is in consultation with staff representatives over the proposed move of production to Romania. West Lancashire district council has already liaised with Jobcentre Plus in order to find out what help could be offered to Honeywell if assistance is needed after the consultation period. On 16 January, an advisor from Jobcentre Plus met with the company to discuss the current situation.
	It is obviously essential that Government agencies provide help to the company and most especially to the employees in dealing with the traumatic effects of the closure.
	The question of skills, retraining and the redeployment experience of those who face redundancy is crucial both for those affected directly and for the country more generally. The Northwest Development Agency has published its framework for regional employment and skills action—FRESA—the purpose of which is to promote a healthy labour market in which employers and individuals get effective help to meet their employment and skills needs. We have a good record of getting people back into work quickly after plant closures and major redundancies. Ensuring that training is training is crucial to that effort.
	The Government are committed to manufacturing, not least because it comprises one fifth of our national output, employs in excess of 4 million workers, produces the majority of our exports and is a key driver of productivity and innovation in the economy. These are difficult times for UK manufacturers, and for manufacturers in Japan, the US and Germany. For the first time since 1974, a synchronised global slowdown in manufacturing is affecting all the world's major industrial regions. We must see the sector through this recession and ensure that it is well placed to take advantage of the upturn, when it materialises.
	Here in Britain, traditional manufacturing industries such as car making have been transformed through new technologies and techniques. Computers, robotics, and innovative processes and design have been harnessed for greater efficiency and productivity. The zenith of car manufacturing in Britain was not, as some maintain, in the 1960s. It is now: we export more than 1 million cars a year—five times more than in 1986—and we have nine major car manufacturers in the UK, which is more than any other EU country. We also have the world's most successful motor sports industry, and both Ford and Nissan have established their design centres in London.
	I very much regret the Garrett announcement and the terrible consequences that it will have for employees. Representatives of the Northwest Development Agency and other agencies stand ready to talk to the company about options for retaining jobs and capacity at the site. Jobcentre Plus staff are ready to help Garrett employees if those discussions fail to bear fruit. I should be happy to meet trade unionists and managers from the company if my hon. Friend the Member for West Lancashire wants to set up arrangements with my office.
	I have tried to put the matter in the context of what is happening with manufacturing in this country. Manufacturing makes up 19 per cent. of the UK's gross domestic product, compared with 14 per cent. in France, 18 per cent. in the US, and 22 per cent. in Germany. It is therefore wrong to say that manufacturing in Britain is suffering adverse effects that do not hit other countries. Our manufacturing industry needs the skills and abilities to compete effectively. We cannot stop companies moving to countries with low-wage economies, but—like Japan, Germany and the US—Britain has never wanted to compete on low wages, and never will. We compete on high wages, high skill and high added value. We must continue to do so, even through these difficult times.
	To sum up: the Government will make advice and help available to the workers concerned in this matter. I will meet those workers, and look at the scale of exportation that could emerge from this, as set out by Amicus. In addition, I shall look at the validity and implications of the Garrett case, although that may be an academic exercise, as we do not live in a command and control economy and therefore cannot prevent companies from locating where they wish.
	It is important that we learn from situations such as that described by my hon. Friend the Member for West Lancashire, and that we continue to help manufacturing businesses to raise their game so that we can develop and maintain a sound manufacturing sector in this country—one that is fit to face the challenges of the 21st century.
	Question put and agreed to.
	Adjourned accordingly at seventeen minutes to Seven o'clock.